President Donald Trump doubled down on his protectionist trade agenda Wednesday, officially raising tariffs on all steel and aluminum imports to 25% and scrapping exemptions from his 2018 policy, a move he insists will revive U.S. factory jobs.
The decision, which hikes aluminum tariffs from 10% and eliminates prior carve-outs, comes amid volatile stock market swings and growing fears of an economic slowdown, yet Trump remains undeterred, framing the taxes as a catalyst for domestic manufacturing.
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The tariff increase, enacted via a February directive, is part of Trump’s broader push to reshape global commerce. Alongside the blanket 25% rates, he’s rolling out “reciprocal” tariffs targeting the European Union, Brazil, and South Korea starting April 2, while maintaining separate levies on Canada, Mexico, and China.
“The higher it goes, the more likely it is they’re going to build,” Trump told CEOs at a Business Roundtable event Tuesday, arguing that steep tariffs will lure companies to invest in American plants. “The biggest win is if they move into our country and produce jobs.”
The announcement triggered an immediate response from the European Union, with Commission President Ursula von der Leyen unveiling countermeasures worth €26 billion (about $28 billion) on U.S. goods, including steel, aluminum, textiles, appliances, and agricultural products, effective April 1.
“As the United States is applying tariffs worth 28 billion dollars, we are responding in kind,” von der Leyen said, signaling a tit-for-tat escalation that could ripple across industries.
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Trump’s tariff gambit follows a rollercoaster week. On Tuesday, he threatened Canada with 50% steel and aluminum tariffs—prompting Ontario to suspend a planned electricity surcharge on U.S. states—before settling on the 25% rate Wednesday.
The White House touted this as proof of the policy’s leverage, with Trump claiming tariff revenues will “throw off a lot of money” for the U.S. treasury. Companies like Volvo, Volkswagen, and Honda are reportedly eyeing expanded U.S. operations, a point administration officials highlight as evidence of success.
PREVIOUS REPORT: President Donald Trump intensified the ongoing trade war with Canada on Tuesday, announcing plans to double tariffs on Canadian steel and aluminum from 25% to 50%. The move, set to take effect Wednesday, was framed as retaliation for Ontario’s recent 25% surcharge on electricity exports to the United States.
Hours later, Ontario’s provincial government backed down from the surcharge, signaling a potential de-escalation—though uncertainty continues to grip markets and trade relations.
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Trump took to his Truth Social platform to declare the tariff hike, writing, “I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD.” The announcement came amid a broader push by the president to impose steep taxes on imports, a cornerstone of his economic agenda following his 2024 campaign promises.
The tariff escalation followed a tumultuous Monday that saw a sharp stock market selloff, with Tuesday bringing further jitters as investors grappled with the implications of Trump’s trade policies.
Economists have warned that such measures could heighten recession risks, disrupting supply chains and increasing costs for American consumers and businesses. Yet Trump has touted tariffs as a powerful negotiating lever, pointing to Ontario’s swift retreat as proof of their effectiveness.
Ontario Premier Doug Ford announced Tuesday afternoon that he had spoken with U.S. Commerce Secretary Howard Lutnick and agreed to scrap the electricity surcharge.
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Ford expressed optimism that Trump would reciprocate by shelving the 50% tariff threat.
“He has to bounce it off the president, but I’m pretty confident he will pull back,” Ford said during a press conference. “By no means are we just going to roll over. What we are going to do is have a constructive conversation.”
The back-and-forth underscores the high-stakes brinkmanship defining U.S.-Canada trade relations under Trump’s administration. The president has offered multiple justifications for his hardline stance, including Canada’s tariffs on U.S. dairy imports, which he claims harm American farmers, and concerns over fentanyl smuggling across the border.
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Trump has also revived the suggestion that Canada should join the United States as its “Fifty-First State” to resolve trade disputes permanently. “This would make all Tariffs, and everything else, totally disappear,” Trump posted Tuesday, a notion that has drawn sharp rebukes from Canadian officials.
Tuesday’s developments highlight the delicate balance Trump must strike as he faces mounting pressure to deliver economic growth. While his tariff strategy has rattled markets and stoked fears of instability, the president remains steadfast, framing such policies as a means to protect American industries and force concessions from trading partners.
Critics, however, argue that the resulting uncertainty could undermine the very economic gains he seeks.
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