US tariffs on steel, aluminium: Why Canada and EU retaliated, while UK is holding out

However, some countries like the UK, Australia, Mexico and Brazil abstained from announcing immediate countermeasures. The UK, in particular, said it was hoping to negotiate a trade deal with US President Donald Trump, but would “keep all options on the table.”

“Like everybody else, I’m disappointed to see global tariffs in relation to steel and aluminium but we will take a pragmatic approach,” UK Prime Minister Keir Starmer said. “We are… negotiating a deal which covers and includes tariffs if we succeed. But we will keep all options on the table.”

First, what did the US do now?

Tariffs are essentially taxes on imports and may be levied by countries as a protectionist measure. The tariffs levied by the US aim to protect American manufacturing against foreign competitors and boost employment in the process.

In February, the US increased tariffs on all steel and aluminium imports into the US to 25 percent “without exceptions or exemptions”, meaning allied countries who have trade deals with the US would also be affected. These became effective on Wednesday.

These tariffs built up on the Section 232 tariffs he imposed in his first term on the two metals on national security grounds. The levies are now extended to a wide range of products, such as stainless steel sinks, horseshoes, aluminium frying pans and steel door hinges.

According to a White House official who spoke to Reuters, exemptions to the 2018 tariff had eroded its effectiveness.

Which countries are affected by these tariffs?

Effectively every country that exports steel and aluminium to the US.

In February, Trump had already singled out China, the world’s largest steel producer, for a 10% tariff on all imports from the country. US imports of Chinese steel and aluminium were valued at $12.5 bn in 2024, according to US International Trade Administration data.

He had also announced a similar 25% blanket tariff on all imports from Canada and Mexico, justifying this as a response to illegal migration and drugs crossing into the US. Canada alone accounted for 23% of US steel imports and 58% of US aluminium imports in 2024, valued at $13 bn, according to US International Trade Administration data. Similar imports from Mexico were valued at $10.4 bn.

On Wednesday, Trump threatened to double the tariff on steel and aluminium from Canada to 50% hours after the original order came into effect. This was thwarted once the Ontario premier, Doug Ford, backtracked on a plan for a 25% surcharge on electricity exports to the US.

How have different countries responded?

1. 01

   CANADA

   Canada promptly announced retaliatory tariffs worth C$29.8 bn ($20.71 bn) on US exports effective Thursday.

   “Following a dollar-for-dollar approach, as of 12:01 AM EDT tomorrow, there will be a 25% reciprocal tariff on an additional C$29.8 billion worth of goods imported from the US,” Canada Finance Minister Dominic LeBlanc said on Wednesday.

   The taxes would apply to computers, sports equipment and cast-iron products besides steel and aluminium. He called the US tariffs “completely unjustified, unfair and unreasonable”.

2. 02

   EUROPEAN UNION

   The EU also announced retaliatory tariffs worth $28 billion on a range of American exports to Europe such as boats, Harley Davidson motorbikes and bourbon whiskey. The retaliatory levies could potentially include clothes, wood, soybeans, meats and agricultural produce, and would become effective on April 13.

   European Commission President Ursula von der Leyen said that Trump’s tariffs were regrettable and “bad for business, and even worse for consumers”. “These tariffs are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up,” she added.

   Trump on Thursday threatened 200% tariffs on wine and champagne from EU countries in the latest escalation in the trade war.

3. 03

   CHINA

   China did not announce retaliatory tariffs outright, but said it would “take all necessary measures to safeguard its legitimate rights and interests”.

4. 04

   UNITED KINGDOM

   No countermeasures have been announced yet, and the country continues to negotiate with the US over a wider economic deal. Trump has signalled his openness to this.

   According to government estimates, the US gets 5% of British steel exports, making it the second-largest export market, and at least 6% of its aluminium exports by volume. However, its share in overall American imports is relatively small, amounting to $1.1 bn of all steel and aluminium imports in 2024.

Why is the UK holding out?

Quite simply, the UK cannot afford to enter into a trade war with the US.

Former Chancellor of the British Exchequer and Conservative Party MP Jeremy Hunt told The Guardian last month that a trade war was futile and costly, given that UK steel and aluminium formed a tiny portion of American imports.

“The reason that you generally hit back with retaliatory tariffs, which is what China, America, Canada and Mexico are all in the process of doing, or threatening to do, is to give you leverage so that the other side then wants to remove the tariffs that they’ve introduced,” he said. “Our…goods exports to the United States account for less than 0.5 percent of US GDP. So we should be very realistic, we don’t have any leverage when it comes to that.”

He also cautioned against the risks to British manufacturers who use imported raw materials, and inflation from a potential trade war.