US Trade Wars with Canada, EU Escalate with New Tariffs

The U.S. introduced 25% tariffs on all steel and aluminum imports from 35 countries, including Canada and the 27-nation EU, ending previous exemptions that covered nations like Argentina, Australia, Brazil, Britain, Japan, Mexico, and South Korea. Trump justified the tariffs as necessary to address national security concerns over the increasing share of steel imports, which he claimed threatened U.S. security.

In response, Canada immediately imposed tariffs on $20.7 billion worth of U.S. exports, while the EU targeted about $28 billion worth of U.S. goods, including not only steel and aluminum, but also textiles, home appliances, and agricultural products. These measures hit iconic U.S. products such as bourbon, motorcycles, peanut butter, and jeans. The EU’s retaliatory tariffs are seen as politically motivated, aiming to exert pressure on U.S. states dominated by Trump’s supporters, such as Kansas, Nebraska, Alabama, Georgia, Kentucky, and Tennessee. However, states like Illinois, the top U.S. producer of soybeans, also face new tariffs.

The EU's retaliation is hitting U.S. spirits producers hard. Chris Swonger, head of the Distilled Spirits Council of the U.S., criticized the move, stating that it undermines efforts to rebuild U.S. whiskey exports to the EU, a market that had seen a 60% growth over the past three years before the tariffs were reinstated.

European Commission President Ursula von der Leyen expressed disappointment over the escalation, warning that tariffs harm both economies. “Tariffs are taxes. They are bad for business, and even worse for consumers,” she said, adding that these actions disrupt supply chains and create uncertainty.

Trump, however, remains resolute, arguing that his tariffs will push foreign manufacturers to move their operations to the U.S., which he claims will create American factory jobs. Speaking to Irish Prime Minister Micheál Martin, Trump reaffirmed his stance: “We’re going to be doing reciprocal tariffs.”

Von der Leyen rejected the rhetoric, stating, “Jobs are at stake. Prices will go up in Europe and in the United States.” She also reiterated the EU's openness to negotiation.

Canada, in turn, announced that its new tariffs, effective Thursday, would target U.S. goods such as computers and sports equipment, calling Trump's actions "unjustified and unreasonable." Australian Prime Minister Anthony Albanese echoed the sentiment, labeling the U.S. tariffs as “entirely unjustified,” but ruled out retaliating with similar measures, stating that tariffs hurt consumers and slow economic growth.

This escalation of trade wars has shaken global markets, with Wall Street showing signs of instability as stock indexes fluctuated sharply, reflecting growing investor concerns about the ongoing economic uncertainty caused by these trade disputes.

Trump’s trade policies have also raised concerns in Mexico, with President Claudia Sheinbaum delaying retaliatory actions until next month, allowing time for further negotiations. Meanwhile, tensions with Canada have been exacerbated by Trump’s suggestion that Canada could become the 51st U.S. state, a proposal met with strong resistance from Canadian officials.

As the trade wars continue, the economic impacts are being felt on both sides of the Atlantic, with industries from spirits to agriculture bracing for the fallout. Both the U.S. and its allies face growing pressure to de-escalate the situation and find a diplomatic solution to avoid further damage to global trade and economies.