Update: Canada and EU retaliate Trump’s steel tariff

Canada has on Wednesday announced plans to impose retaliatory Tariffs in response to President Trump’s tariffs on steel and aluminium.

Before Wednesday, Trump had only enacted tariffs that applied to China, Mexico and Canada this term.

In the case of Mexico and Canada, businesses can avoid paying tariffs through April 2 if they comply with the USMCA.

Canada announced a series of retaliatory measures on Wednesday morning.

They are set to take effect on Thursday.

The measures include includes 25% tariffs on $29.8 CAD billion ($20.1 billion) imports of US goods such as steel and aluminum products.

Canada also targeted billions of dollars worth of imports from the US.

The imports are of computers, sporting equipment and cast iron products.

Finance Minister Dominic LeBlanc said on Wednesday,

“We will continue to maintain our countermeasures and increase them on April 2nd.”

LeBlanc is set to travel to Washington on Thursday to meet with US Commerce Secretary Howard Lutnick Thursday.

“The conversation tomorrow (Thursday) will be around lowering the temperature,” LeBlanc said.

He said they will also be focusing on the process that President Trump set up.

He added that Secretary Lutnick has up to April 2nd to determine a series of global tariff decisions.

April 2 is the date the administration said reciprocal tariff actions will be announced across many countries.

Speaking at an Ontario-based steel mill on Wednesday, Canada’s Prime Minister Designate Mark Carney said he is ready to meet with Trump.

However, he wants America to respect its northern neighbor’s sovereignty.

Carney’s remarks marked his first direct message to Trump since winning his party’s leadership election earlier this week.

“We’re working for a common approach, a much more comprehensive approach for trade,” he added.

“We are all going to be better off when the greatest economic and security partnership in the world is renewed …

“You have a new government but the same commitment.”

Canada’s Algoma Steel (ASTL) said it’s temporarily suspending all shipments to the US in response to the tariffs.

Reports say the pause will be in place until the company has a better understanding of where tariffs stand.

The CEO of ASTL, Michael Garcia, on Tuesday said this is given the heightened volatility lately, which was on full display on Tuesday.

He was speaking in an interview on CNBC.

Algoma is one of the largest Canadian steel companies and a major supplier to the US.

In anticipation of the tariffs and the potential financial ramifications of them, Algoma laid off 20 workers, the Toronto Star reported.

The EU responded to the “unjustified” tariffs Wednesday by unveiling countermeasures.

These countermeasures are on up to €26 billion ($28 billion) worth of American goods exports.

They included tariffs on boats, bourbon and motorbikes.

The measures, which will come into force in April, are “swift and proportionate,” it said in a statement.

The US was the second-biggest destination for the EU’s iron and steel exports last year.

This was according to official figures released Wednesday.

In 2023, the latest year for which data is available, it was also the second-largest buyer of European aluminum.

The tariffs’ “aggregate macroeconomic effect on Europe is likely to be small,” said economists at Nomura.

But they added: “Trump is likely to announce further tariffs on April 2… And sizable negative effects on global and European growth.”

They further added that it may also hit even before major tariffs are implemented.

They claim it will come via the rise in trade policy and geopolitical uncertainty that Trump’s presidency is generating.

Shortly before the tariffs went into effect, Australian Prime Minister Anthony Albanese criticized them as “entirely unjustified”.

He also said they were against the spirit of the two nations’ enduring friendship.

However, he said Canberra will impose no reciprocal levies.

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