Things are not looking good for international trade in Europe and the Americas. On Wednesday, Canada and the European Union unveiled retaliatory levies against the United States, hours after President Donald Trump’s sweeping tariffs on imported steel and aluminium took effect. This triggered more tremors through financial markets and fueled fears of inflation and recession.
USA Today reports that Mexican President Claudia Sheinbaum said Wednesday her government will wait for a possible resolution in the coming weeks before deciding on retaliation.
Trump’s global tariffs of 25% on all metals imports also extend the duties to hundreds of products made from the metals. trump defended the tariffs in remarks late Tuesday and hinted at the possibility of higher levies in the future.
The action comes amid broad economic upheavals: The National Oceanic and Atmosphere Administration revealed it is laying off 1,029 workers as part of the Trump administration’s mass layoffs across federal departments. Federal agencies face a deadline Thursday to submit plans for large-scale layoffs as part of the administration’s effort to shrink the federal government.
US stocks were mostly higher in afternoon trading Wednesday but have fallen sharply in recent days amid constant news of tariffs and job cuts. JP Morgan’s chief economist said Wednesday that there is a 40% chance of a US recession in 2025.
Meanwhile, the US has promised to counter Europe’s levies with additional tariffs on imports from the European Union, Trump said on Wednesday. He said, “Of course, I will respond,” after the EU announced new tariffs on $28 billion of US industrial and farm products. The tariffs counter Trump’s 25% tariffs on all aluminium and steel imports.
“The European Union treats us very badly, and they have for years,” Trump said as he met with Irish Prime Minister Michael Martin in the Oval Office. Ireland is part of the EU. He accused Ireland and other European nations of taking advantage of the US. He also accused Ireland of drawing pharmaceutical companies away from the US.
He said to Martin, “Look, the Irish are smart. You have smart people.And you took our pharmaceutical companies, and other companies, through taxation. They made it very good for companies to move over there.”
Trump also said the EU, like all other nations, will be subject to his new reciprocal tariffs, which will go into effect on April 2. Then, the US will respond to any country’s tariffs applied to US exports by matching with identical levies of the same rates.
“It doesn’t even matter what it is,” Trump said. “If they charge us 25% or 20% to 10%, then that’s what we’re charging them.”
Canada has also announced tariffs on more than $20 billion worth of American goods in retaliation for the tariffs on Canadian steel and aluminium. Earlier, Ontario Premier Doug Ford said he would fly to Washington on Thursday for talks with US Commerce Secretary Howard Lutnick and other Trump. administration officials to discuss revising the US-Mexico-Canada Agreement on trade.
Trump had on Tuesday threatened Canada with doubling the duty to 50% on its steel and aluminium products. He, however, reversed course after Ford, essentially said he would suspend a proposed 25% electricity surcharge on about 1.5 million US energy users in New York, Michigan and Minnesota. Ford made his decision after a phone call with Lutnick: “We have both agreed, let cooler heads prevail,” Ford said
