US President Donald Trump has said he will respond to the EU's retaliatory tariffs against his 25% import tariffs on steel and aluminium

US President Donald Trump has said he will respond to retaliatory tariffs from the European Union at a time when the global trade war is escalating. He did not specify how he would respond to the retaliation, but when asked by reporters at the White House on Wednesday, he said: "Of course I will respond." Trump threatened to double tariffs on Canadian steel and aluminum to 50 % before backing down to a 25% rate after Ontario suspended a surcharge on electricity to the US earlier in the day.

Reactions of business partners

Trump on Wednesday moved to impose 25 % tariffs on steel and aluminium across the board on other countries, prompting immediate retaliation from the EU and Canada.

The EU responded with import tariffs on €26 billion worth of US goods "equivalent to the economic scale of the US tariffs", a significant retaliation to the Trump administration's recent escalation of tariffs. On April 1, the Commission will renew countermeasures from 2018 to 2020 during Trump's first term against €8 billion worth of US goods, followed by a new €18 billion package of tariffs in mid-April.

In its statement, the European Commission said: "The Commission deplores the US decision to impose these tariffs as it considers them unjustified, distorting transatlantic trade and harmful to businesses and consumers as they often lead to higher prices." She also added that "The EU remains ready to work with the US administration to find a negotiated solution" and that the countermeasures "can be cancelled at any time if such a solution is found".

Canada has responded with new 25% tariffs on US-made goods worth 30 billion Canadian dollars (19 billion euros), effective from midnight Thursday New York time. The levies will match US tariffs dollar-for-dollar. In total, the countermeasures will affect 12.6 billion C$ (€8.05 billion) worth of steel products, 3 billion C$ (€1.9 billion) worth of aluminium and 14.2 billion C$ (€9.1 billion) worth of other items. Canada is the largest exporter of steel to the US, followed by Mexico, Brazil and China in 2024.

Other countries have not taken immediate countermeasures against Trump's metal tariffs, but most have expressed a willingness to dialogue. British Prime Minister Keir Starmer said that Britain "will have all options on the table" a "negotiate an economic agreement that includes and will include tariffs if we succeed". Australian Prime Minister Anthony Albanese said Trump's tariffs are "completely unjustified" and that Australia will continue to negotiate an exemption. China did not respond directly to the new tariffs, but said it owed the US "a big thank you" because Beijing had successfully controlled the fentanyl trade.

Global markets bounce off the bottom

US stock markets bounced off the lows despite the recent escalation of the global trade war following cooler-than-expected inflation data released on Wednesday. The S&P 500 index rose around 0.5 % after falling into near-correction territory this year, led by major technology stocks. The U.S. dollar weakened against most G-10 currencies on expectations that the Federal Reserve may cut interest rates sooner due to economic concerns.

However, analysts have warned that the market recovery may be short-lived due to lingering uncertainties. Michael Brown, Pepperstone's chief analyst, wrote in a note that he will continue to sell into the stock rally and expects gold to reach a new high due to the risk-off sentiment.

However, European equity markets continued to outperform global peers on the back of expectations of easing fiscal rules on defence spending. Ukrainian President Volodymyr Zelensky said Ukraine had accepted a 30-day ceasefire agreement with Russia, adding to optimism about the bloc's prospects. The euro fell slightly against the US dollar but remained at a four-month high just below 1.09.

Asian markets were mixed in early Thursday trading, with Japan's Nikkei 225 and South Korea's Kospi rising, while Australia's ASX 200 and China's Hang Seng index continued to fall.

euronews/ gnews.cz - RoZ