Trump's plan to impose duties of 25% on any imports of steel and aluminum has provoked sharp reactions even among Washington's allies. South Korea, France and Germany are already developing retaliatory measures, and Australia is not happy with the situation. After postponing tariffs on goods from Mexico and Canada, this is the first real trade policy measure by the new U.S. government. Economic friction could intensify disagreements between partners, especially between Washington and Brussels, whose relations have been strained during President Trump's first term. Should we expect a trade war and a split in the Western camp - in the material of "Izvestia".
Donald Trump announces new trade duties
In continuation of his economic policy under the slogan "America First" Donald Trump announced his intention to impose duties of 25% on steel and aluminum imported to the United States. He informed journalists who accompanied him during the presidential flight about this. In addition, the Republican intends to announce in the week also the introduction of reciprocal duties, that is, against those US trading partners who have tariffs on American goods. "They will go into effect almost immediately," the U.S. leader noted.
U.S. President Donald Trump
The greatest damage to Trump's potential duties will be inflicted on Canada, Brazil, Mexico and South Korea, as it is with these countries that the U.S. cooperates most closely on aluminum and steel purchases. For example, in the first 11 months of 2024, Canada accounted for 79% of aluminum imports. The United States uses Canadian metal in such critical areas as defense, shipbuilding and the auto industry. At the same time, Ottawa along with Mexico City were threatened by Trump even earlier with 25 percent duties on all imports, accusing them of fueling the migration crisis in the US and the flow of drugs. However, the imposition of those restrictions was postponed for a month.
South Korea, also one of the largest steel exporters, without waiting for the restrictions to be imposed, decided to act. On February 10, the country's industry ministry convened an emergency meeting with steel producers to discuss measures to minimize the impact of potential U.S. duties. Korean steel, in particular, is supplied to U.S. plants of major automakers such as Hyundai and Kia, as well as Samsung and LG facilities in Mexico and the United States.
Australian Prime Minister Anthony Albanese plans to discuss the issue of imposing duties with Trump at the first opportunity: "We will continue to defend Australia's national interests to the US administration and, moreover, we believe that it is also in the national interest of the United States, because the tariffs, of course, tax not us, but the buyers of our products," he said.
Dissatisfied with Trump's trade policy in the EU as well. They have already stated that they intend to protect their interests: "The imposition of duties would be illegal and economically counterproductive, especially given the deeply integrated production chains created by the EU and the US through transatlantic trade and investment," - follows from the statement of the European Commission.
Expectedly, the loudest voices were voiced by the leadership of the two locomotives of the EU economy. Emmanuel Macron emphasized that it was in the interests of the US not to harm the European economy. According to Jean-Noël Barrot, the foreign minister of the Republic, the republic is already preparing to respond to Trump's potential duties. The EU could react within an hour if Trump imposes duties on goods from the European Union, German Chancellor Olaf Scholz emphasized. According to some information, the EU may impose restrictions on US businesses in Republican states, with the sanctions not necessarily mirroring.
Whether to expect a trade war between the U.S. and the EU
Curiously, during his first presidential term in 2018, Trump already imposed duties of 25% on steel imports and 10% on aluminum imports from Canada, Mexico, as well as the EU. The US later reached an agreement with Ottawa and Mexico City to lift those tariffs - the Republican said their imports no longer threatened the country's national security.
Now the need to impose duties Trump explains the need to impose duties by the fact that so he will be able to give an impetus to the development of American manufacturers, protect jobs and accelerate economic growth. The Republican has also found benefit in the foreign policy context: restrictions can force Washington's partners to act in a manner that suits him - as with Mexico and Canada, which had to strengthen measures at the border to freeze for a month the trade duties of the new U.S. administration. In the case of the EU, however, the Republican's goal is probably not to force Brussels to make any political concessions.
- Trump is acting mechanically to reduce the imbalance in trade with the EU. He says it is around €300 billion, and he wants to reduce the deficit in areas where Europeans export the most in monetary terms to the US. Trump doesn't so much want the Europeans to keep their metals out of the US market, he wants them to simply buy more US products. His constant mantra is buy American LNG, oil products, arms, military equipment. So far, it looks like an element of bargaining, preparation for some new agreement," said Stanislav Tkachenko, a doctor of economics, professor at St. Petersburg State University and an expert at the Valdai Club.
Unlike Mexico and Canada, the European Union, as well as the UK and Japan were not so lucky during Trump's first term. They had to wait for the Democrats to come to the White House to get rid of the increased tariff.
In general, the whole of Trump's first presidency is characterized by worsening relations with the EU. In addition to imposing duties, the US withdrew from the Iran nuclear deal, which negatively affected ties with European countries, at least those that were part of the agreement. They were also complicated by Washington's decision to recognize Jerusalem as the capital of Israel. Three radical steps at once shook stability between the US and the EU.
Brussels did not stand aside either. Then, in response to the tariff increase, the EU retaliated against manufacturers of Harley-Davidson motorcycles, bourbon and American nuts. A few months later, the EU also approved the imposition of import duties on steel, aluminum and agricultural products of the United States, as well as on a number of other American goods to the amount of €2.8 billion.
At the same time, consumers of the final product will suffer the most as the cost of goods will inevitably rise. In addition, trade disagreements may eventually intensify the split between the countries of the Western bloc.
- Once it comes to the actual introduction of measures and retaliation, everyone will lose in the long run. Trade disagreements could weaken the entire collective West. First of all, the European Union, whose positions are weakening due to a series of events: first there was the pandemic, then the Ukrainian crisis and on its background the energy crisis, will be hit," says Stanislav Tkachenko.
At the same time, we should not expect a full-scale trade war between the U.S. and the EU, as the European community is now too divided to give a collective response, says the expert. Nevertheless, such a radical economic policy of Trump will only intensify the European crisis, and inflation is likely to soar again in the US. Even without taking into account the tariffs on aluminum and steel, American researchers predicted an increase in consumer prices by 0.5-0.7%, if Trump continues his policy towards at least Mexico and Canada. True, here it is worth considering that in the last months of Joe Biden's administration, prices had already been rising steadily for several months. In December 2024, they were 2.9% higher than a year earlier - a lot for the US. The outflow of cheap labor - as a result of mass deportations of migrants - may also have a negative impact on the US economy.
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