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India
In a bold move that reignited global trade tensions, former U.S. President Donald Trump announced on Monday a 25% tariff on steel and aluminum imports. The announcement, which followed a promise made just a day earlier, drew immediate reactions from global markets and foreign leaders, with warnings of retaliatory measures from Europe and China.
Trump made the announcement aboard Air Force One while traveling to Louisiana and formalized the policy at the White House later in the day. “Today, I’m simplifying our tariffs on steel and aluminum,” Trump said in the Oval Office. “It’s 25 percent, no exceptions, no exemptions.”
Global Response and Concerns
While global markets showed resilience, with some traders dismissing the news as “tariff fatigue,” the new policy raised alarms among key U.S. trade partners. Canada, Mexico, Brazil, and South Korea—major steel exporters to the U.S.—are expected to face significant economic impacts.
European leaders were quick to condemn the move. French President Emmanuel Macron promised to challenge Trump’s broader tariff strategy, while German Economy Minister Robert Habeck warned that “a tariff war produces only losers.” The European Commission vowed to defend its economic interests, signaling potential countermeasures.
Canadian steelmakers called the tariffs “massively disruptive,” while the U.K.’s steel industry labeled the decision a “devastating blow.”
Potential Expansion to Other Sectors
Beyond steel and aluminum, Trump hinted at broader tariffs on sectors such as automobiles, pharmaceuticals, and computer chips. The former president also mentioned the possibility of exempting Australia, citing the nation’s strong trade relationship with the U.S.
“We have a trade surplus with Australia because they buy a lot of airplanes. They’re far away and need a lot of them,” Trump explained.
Impact on U.S. Trade Policy
During his presidency from 2017 to 2021, Trump frequently used tariffs as a tool to protect American industries, which he believed were being unfairly challenged by Asian and European competitors. His approach, often referred to as “America First,” sought to rebalance trade relationships through aggressive measures.
The former president’s focus on China led to a series of tit-for-tat tariffs between the two largest economies. On Monday, Chinese retaliatory tariffs on U.S. coal and liquefied natural gas came into effect. A Chinese foreign ministry spokesperson reiterated, “There are no winners in a trade war.”
Tariffs and the Markets
Despite the looming trade conflict, Wall Street remained largely unaffected. Major indices closed higher, with markets in London, Frankfurt, and Hong Kong showing gains. Analysts attributed the market’s response to a growing sense of “tariff fatigue” among investors.
Kathleen Brooks, a research director at XTB, commented, “The fact that equity indices are rising despite tariff announcements suggests traders are no longer reacting as strongly as before.”
The dollar also strengthened against the Canadian dollar, Mexican peso, and South Korean won following the announcement.
While Trump insisted that the burden of the tariffs would fall on foreign exporters, many experts warned that U.S. consumers would likely feel the effects in the form of higher prices.
