Following President Donald Trump’s decision to increase tariffs on aluminum and steel imports, major trading partners have swiftly retaliated by imposing significant new taxes on a wide range of U.S products, including textiles, water heaters, beef, and bourbon.

Canada’s Response

Canada, which is the largest supplier of steel and aluminum to the U.S., announced on Wednesday that it will impose a 25% reciprocal tariff on steel products and increase taxes on various other items such as tools, computers, servers, display monitors, sports equipment, and cast-iron products.

European Union’s Countermeasures

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Meanwhile, the European Union has decided to raise tariffs on American beef, poultry, bourbon, motorcycles, peanut butter, and jeans. These measures are expected to cost companies billions of dollars and escalate uncertainty in major global trade partnerships. This could lead to higher prices for consumers in both Europe and the United States, potentially affecting jobs as well.

Ursula von der Leyen, President of the European Commission, expressed regret over these measures, stating, “Tariffs are taxes. They are bad for business, and even worse for consumers.” The EU’s strategy targets products primarily from Republican-held states, aiming to pressure the U.S. while minimizing harm to Europe itself.

Impact on Spirits Producers

The dispute has also adversely affected spirits producers. Chris Swonger, head of the Distilled Spirits Council, commented on the EU’s decision, “It is deeply disappointing and will severely undercut the successful efforts to rebuild U.S. spirits exports in EU countries.” Notably, U.S. whiskey exports to the EU had surged by 60% over the past three years following the suspension of a previous set of tariffs.

Potential for Negotiation

Von der Leyen has emphasized that the EU remains open to negotiation. Canada’s incoming Prime Minister, Mark Carney, also expressed readiness to engage with Trump, highlighting the importance of a respectful and comprehensive approach to trade.

Call for De-escalation

The American Chamber of Commerce to the EU has urged both sides to de-escalate and seek a negotiated outcome, emphasizing that the current tariffs and countermeasures will harm jobs, prosperity, and security across the Atlantic.

EU’s Planned Tariff Reimposition

The EU plans to reimpose previously suspended taxes from 2018 to 2020 on April 1, followed by additional duties on April 13 targeting 18 billion euros ($19.6 billion) in U.S. exports. EU Trade Commissioner Maroš Šefčovič, who recently visited Washington to discuss these issues, highlighted the need for cooperation to avoid unnecessary economic burdens.

Canada’s Comprehensive Tariffs

Effective from 12:01 a.m. Thursday, Canada will enforce 25% reciprocal tariffs on steel and aluminum products, along with additional tariffs on imported U.S. goods totaling $29.8 billion Canadian (US$20.6 billion). This is in addition to previous counter tariffs in response to other Trump-imposed tariffs.

Impact on European Steel Companies

The European steel industry is bracing for potential losses, with Eurofer estimating a loss of up to 3.7 million tons of steel exports. The U.S. remains a significant market for EU steel, accounting for 16% of its steel exports.

The ongoing trade disputes underscore the complexities of international trade relations and the significant impact of tariffs on global economic dynamics.