The EU has retaliated against Trump’s 25% tariffs on steel and aluminum just hours after they took effect at midnight New York time, escalating a trade war that has rattled financial markets and threatened the global economy. The European Commission said its measures would affect up to €26bn of American goods, matching the US tariffs on European exports, and would take effect in April, leaving some time to negotiate with Washington.
European Commission president Ursula von der Leyen said the EU regretted Trump’s decision and that tariffs were “bad for business, and even worse for consumers" adding that “tariffs are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up." They will go up... for Europe, pushing the economy further into stagflation.
Brussels hit back after the US tariffs came into force on Wednesday, as Trump pressed ahead with his trade agenda despite growing concern over the risk of a domestic recession.
As part of its retaliation, Brussels reinstated measures introduced during Trump’s first term on €4.5bn of US exports from April 1. These include levies of up to 50% on products such as bourbon whiskey, jeans and Harley-Davidson motorcycles. That's right: when you barely imports goods from the US, these are the "essential" products you are forced to crack down on.
The EU has also drawn up levies on a further €18bn of US goods, which could include cosmetics, clothes, wood, soybeans, chicken, beef and other agricultural produce the FT reported. The measures, which could be expanded to include another €3.5bn of goods, require approval by EU countries and would come into force on April 13.
But in a stark example of just how much Trump has broken the world's resolve, the UK broke with the European Union and its decision to retaliate immediately, and reaffirmed its commitment to US trade talks even as British exports were also swept up in President Donald Trump’s global steel and aluminum tariffs.
UK leftist Prime Minister Keir Starmer said he was “disappointed” by the US decision to impose 25% levies on foreign metal products without exemptions on Wednesday morning, telling the House of Commons that his government would keep “all options” on the table in terms of a response. Yet despite the jawboning, Junior Treasury minister James Murray told Times Radio the UK wouldn’t retaliate immediately while reserving the right to do so in due course.
"We're Now Facing A New Crisis" - Canada Cuts Rates (As Expected), Announces Retaliatory Tariffs
The Bank of Canada cut interest rates by a quarter percentage point - as expected - and called the trade battle with the US a “new crisis,” but pushed back on expectations that policymakers were on a predetermined cutting path.
“We're now facing a new crisis. Depending on the extent and duration of new US tariffs, the economic impact could be severe,” Bank of Canada Governor Tiff Macklem said in prepared remarks of an opening statement.
Macklem called the uncertainty of the tariff dispute “pervasive” and said that it was “already causing harm.”
Officials said the “continuously changing” US tariff threat was hitting consumers' spending intentions and limiting businesses' plans to hire and invest.
At the same time, Macklem said the bank “will proceed carefully with any further changes” to borrowing costs, and officials would “need to assess both the upward pressures on inflation from higher costs and the downward pressures from weaker demand.”
There's lots of red in the red-line from the prior statement:
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