Trump tariffs of 25% on steel and aluminium come into effect globally as Europe says it will retaliate – business live
EC president announces EU countermeasures to US tariffs from April
Here is European Commission president Ursula von der Leyen announcing the EU’s countermeasures this morning.
As of this morning, the United States is applying a 25% tariff on imports of steel and aluminium. We deeply regret this measure.
Tariffs are taxes. They are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices up. Nobody needs that on both sides, neither in the European Union nor in the United States.
The European Union must act to protect consumers and business.
She said the counter measures “are strong but proportionate”. As the United States is applying tariffs worth $28bn, the EU is responding with countermeasures worth €26bn. She added:
In the meantime, we will always remain open to negotiations.
Key events
The relief rally on Wall Street, sparked by a dip in US inflation, is petering out.
The Dow Jones is now down 0.7%, the S&P 500 is flat and the Nasdaq, which rose 1.8% earlier, is only 0.7% ahead.
Here in Europe, the German and Italian equity markets are still more than 1% ahead while the French bourse has pared gains to trade 0.3% higher. The UK’s FTSE 100 index in London has edged 0.2% higher.
Starmer: Negotiating economic deal with US, but ‘will keep all options on the table’
Speaking at prime minister’s questions in parliament, Sir Keir Starmer didn’t rule out retaliatory tariffs against the US.
I am disappointed to see global tariffs in relation to steel and aluminium, but we will take a pragmatic approach.
We are… negotiating an economic deal which covers and will include tariffs if we succeed.
But we will keep all options on the table.
You can read more on our politics live blog:
Canada to hit back with $20bn of counter-tariffs – AP
Canada is to hit back at Donald Trump’s 25% steel and aluminium tariffs with $20.7bn in retaliatory tariffs, Associated Press reported, citing a senior Canadian government official.
The EU has also announced retaliatory trade action with new duties on US industrial and farm products, responding within hours to the Washington’s increase in tariffs on all global steel and aluminium imported into the US to 25%.
Canada is the largest foreign supplier of steel and aluminium to the US.
BREAKING: Canada will announce more than $20 billion in retaliatory tariffs in response to U.S. President Donald Trump’s metal tariffs, AP sources say. https://t.co/OHfmfwWa7J
— The Associated Press (@AP) March 12, 2025
Bank of Canada cuts interest rates, citing trade tensions and US tariffs
While US interest rate cuts are uncertain despite the dip in inflation today, the Bank of Canada has taken action. It reduced its policy rate by a quarter of a percentage points to 2.75% from 3%.
The central bank is worried about the impact of US tariffs on the Canadian economy. It explains.
The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth. However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape.
BritishAmerican Business, a transatlantic trade and business group, representing more than 470 companies on both sides of the Atlantic, has responded to the US tariffs on steel and aluminium.
Its chief executive Duncan Edwards said:
The new US administration has set out to be a pro-business, pro-growth government and there is much in its agenda that our members will be encouraged by. However, imposing tariffs on a close trading partner like the UK does not feel helpful to either country. Rather than fostering economic growth, these measures introduce unnecessary friction in a strong and mutually beneficial trade relationship.
We welcome the UK government’s decision not to introduce its own retaliatory tariffs, and we hope discussions between the two governments can help reduce trade and investment barriers, strengthen economic ties, and ensure businesses on both sides of the Atlantic can thrive.
While US inflation has cooled, US tariffs threaten to push price growth higher again in coming months, warned James Knightley, chief international economist at ING.
He said:
Good news on inflation, but the fact it was overwhelmingly caused by falling airfares has muted the market reaction. Tariff fears are already seeing companies nudging prices higher and risk higher inflation readings over the summer.
Cooling US inflation sparks (limited) relief rally on Wall Street
There has been a bit of a relief rally on Wall Street following the slowdown in US inflation. The Dow Jones has edged 0.1% higher while the tech-heavy Nasdaq is 1.7% ahead and the S&P 500 index gained 0.7%.
Over here, European stock markets have notched up chunky gains despite the looming trade war between the United States and the European Union. Sentiment has been lifted by hopes of a 30-day ceasefire in Ukraine – although Russia is yet to respond to the proposal agreed by the US and Ukraine. The German, French and Italian indices are between 1.2% and 1.8% higher. The UK’s FTSE 100 index is only 0.3% ahead, up 25 points at 8,521.
The dollar has strengthened today following days of selling pressure sparked by “Trumpcession” fears. The greenback is trading 0.4% higher against a basket of major currencies. Sterling is down a smidgen at $1.29340 while the euro has lost 0.3%, dipping back below $1.09 to $1.0890.
Daniela Sabin Hathorn, senior market analyst at the trading platform Capital.com, said:
Consumer inflation has softened in February. That is the key takeaway from the latest data released on Wednesday. Both headline and core CPI came in lower than expected at 2.8% and 3.1% respectively. Additionally, both monthly readings also dropped from the previous month and came in below expectations at 0.2%.
As anticipated, the initial market reaction was a relief rally in US equities, accompanied by a weaker US dollar and lower yields. However, this momentum has struggled to sustain itself. The dollar and yields have rebounded from their initial knee-jerk declines, turning higher, while equity indices have found limited buying interest to push significantly higher.
“Not as good as it looks” – is the verdict on the drop in US inflation from Thomas Ryan, North America economist at Capital Economics.
The softer 0.23% month on month rise in core CPI in February is not as encouraging at it looks, as the components which feed into the Fed’s preferred PCE price index rose more sharply. While it will depend a lot on the producer price index (PPI) data tomorrow, our preliminary calculations point to another above-target consistent 0.3% month on month gain in the core PCE deflator last month.
Core CPI inflation was pulled down by some much smaller gains in hospital services and motor vehicle insurance, as well as a sharp 4% month-on-month decline in airfares. None of those feed into PCE, however, although we assume that the PPI data tomorrow will also show at least moderate declines in the key airfare components.
Otherwise, food at home prices were broadly unchanged despite another 10% surge in egg prices. With energy prices also better behaved on the month, this led to a relatively soft 0.22% month-on-month rise in headline CPI, pulling down the annual rate to 2.8%, from 3.0%.
The upshot is that, absent a huge downside surprise in the PPI data tomorrow, inflation is still running too hot for the Fed to consider cutting interest rates. At next week’s meeting, we expect the Fed to reiterate that it is in no hurry to loosen policy again.
US inflation dips more than expected to 2.8%
Inflation in the United States has dipped more than expected to an annual rate of 2.8% last month.
The annual inflation rate, measured by the consumer price index, fell from 3% in January, and was lower than the 2.9% expected by economists.
Wall Street futures extended gains after the figures.
The core inflation rate, which strips out food and energy (they tend to be volatile), also came in lower than expected at 3.1% versus expectations of 3.2%, and down from 3.3% the previous month.
The industry group spiritsEUROPE said it is “extremely concerned” by the EU announcement of €26bn countermeasures against new US tariffs on global steel and aluminium exports.
It urged the EU and the US to “keep spirits out of unrelated disputes”.
Pauline Bastidon, trade & economic affairs director at spiritsEUROPE, said:
Yet again, spirit drinks have become collateral damage in an unrelated trade dispute. As highlighted in our numerous engagements with the European Commission over the last seven years, we fail to understand how this will help with the broader, unrelated dispute on steel and aluminium. The EU and US spirits sectors stand united in their steadfast commitment to maintaining transatlantic spirits trade tariff-free.
EU official uses ‘stinking fish’ analogy for negotiations
Lisa O’Carroll
Irish prime minister Micheál Martin will be meeting Donald Trump in the Oval Office around 2.45pm London time where they will face the media before going into a bilateral meeting. Ahead of that he will have a breakfast meeting with JD Vance, with Ireland’s surplus trade with the US very much in the cross hairs.
An EU official this morning suggested it was pointless at this stage to try and negotiate with the US as tariffs were such a crude way to address imbalances and also warned that no EU leader has the competency to do so.
It is not very productive to now start negotiating about removing the tariffs. That’s a bit stinking fish theory, where you put a stinking fish on the table, and then you start negotiating to remove that stinking fish, and then you say, Wow, we have a great result. There’s no stinking fish on the table. That is not a very productive conversation,
the official said.
That is not our objective. What we are looking for in negotiations is a productive discussion about creating value to what is the largest trade and investment relationship in the world, which is the transatlantic relationship.
To recap: The EU has announced it will impose trade “countermeasures” on up to €26bn (£22bn) worth of US goods in retaliation to Donald Trump’s tariffs on steel and aluminium imports, escalating a global trade war.
The president of the European Commission, Ursula von der Leyen, called the 25% US levies on global imports of the metals “unjustified trade restrictions”, after they came into force at 4am GMT on Wednesday.
“We deeply regret this measure,” von der Leyen said in a statement, where she announced “strong, but proportionate” countermeasures would come into force from 1 April. “Tariffs are taxes, they are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy,” she said.
The retaliatory measures include Brussels reimposing tariffs on US goods including bourbon whiskey, jeans and Harley-Davidson motorbikes, which it introduced during the first Trump term and later suspended after talks with his successor, Joe Biden.
These tariffs, which target notable US goods worth €4.5bn, often from Republican states, will snap back on 1 April. The list was worth €6.3bn in 2018 but has shrunk because of Brexit and declining US exports.
Separately, the commission plans further retaliation targeting goods worth €18bn, including a wide range of steel and aluminium products, as well as agricultural produce, such as poultry, beef, seafood and nuts. These tariffs would be imposed from mid-April, after a vote by EU member states and consultations with industry in an attempt to minimise damage to the European economy.
“We try to hit … where it hurts,” said a senior EU official, who said the bloc was targeting soya beans, which are grown in Louisiana, the state of the US speaker of the House, Mike Johnson. “We love soybeans, but we’re happy to buy them from Brazil or from Argentina or from anywhere else.”
While the commission announced that its measures would total €26bn, EU officials later said they would probably target €22.5bn of US goods, as some products are likely to be filtered out after talks with businesses and member states.
However, further steps have not been ruled out. France’s European affairs minister, Benjamin Haddad, said on Wednesday that the EU could “go further” in its response to the US tariffs. The measures “are proportionate”, Haddad told TF1 television. “If it came to a situation where we had to go further, digital services or intellectual property could be included,” he said.
EU officials hope that pressure on Republican states and US business will help bring about a deal.“We will always remain open to negotiation,” von der Leyen said. “We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs.”
Britain will not issue its own immediate measures in response to the US tariffs but the government said it would “reserve our right to retaliate”.
The introduction of EU measures came after a day of drama on Tuesday, when Trump threatened to double tariffs on Canadian steel and aluminium in response to Canadian threats to increase electricity prices for US customers.
The US president backed off from those plans after the Ontario premier, Doug Ford, agreed to suspend his province’s decision to impose a 25% surcharge on electricity exports to the states of Minnesota, Michigan and New York.
‘This trade war serves no-one’: business and trade committee chair pushes for tariff exemptions
The chair of the UK’s influential business and trade committee has urged the government to push to secure tariff exceptions, after the US began enforcing higher (25%) tariffs across the board on steel.
Next Tuesday, the committee will hold a session with steel industry representatives on support for the industry and its survival, but the latest tariffs will now be centre stage.
Liam Byrne, the chair of the cross-party committee, said:
This trade war serves no-one. The UK government must push for urgent negotiations with the US to secure exemptions, and work with British businesses to protect them from these damaging measures.
The US blanket 25% tariff on global steel imports is deeply concerning for UK industry, threatening jobs and competitiveness at a time when our steel sector is already under immense pressure.
Bridgnorth Aluminium operates the only fully integrated aluminium coil rolling plant in the UK and employs 330 people in Shropshire.
The company sells 20% of its volumes into the US and says the introduction of aluminium and steel tariffs will create uncertainty and, potentially, makes the business less competitive than the current system of quotas and exemptions.
Adrian Musgrave, head of sales at Bridgnorth Aluminium, said:
These tariffs add another dimension to the global uncertainty we are all currently dealing with.
If there is no movement on the 25% rate it will make trading with the US more difficult for us as a business, but it could also cause supply and cost issues for firms in America too.
For example, for a significant portion of our US sales, there is currently no US producer. This means there is no threat to domestic aluminium production, yet companies using our aluminium may soon be hit by rising costs.
What would we like to see? A deal between the UK and the US that removes tariffs all together or significantly reduces it from the 25% rate. This is something we are championing with the Department for Business and Trade and key manufacturing bodies, such as the Aluminium Federation, Confederation of British Metalforming and Make UK.
We are grateful for the engagement of the UK government and the manufacturing associations, who are all lobbying hard on our behalf.
The European Union exported €77.8bn of iron and steel and related articles last year.
It imported €73.1bn, resulting in a trade surplus of €4.7bn, according to the latest official figures from Eurostat, the EU’s statistics office, out this morning.
Compared with 2019, there was a substantial increase in the trade of these products: exports rose by 15.2%, or €10.3bn, and imports climbed by 23.7%, or €14bn. These increases occurred despite a decline in the physical weight of exports by 17.3% and imports by 1.6%, indicating that the value rise was primarily driven by increasing prices, Eurostat said.
For iron and steel, Türkiye was one of the main trading partners last year, occupying the first place in exports with a total of €6.2bn and third place in imports with €3.5bn.
The United States was the second biggest export partner with €5.4bn worth of iron and steel, followed by the United Kingdom (€4bn), Switzerland (€2.1bn) and Mexico (€1.7bn).
‘I feel utter anger’: a movement to boycott US goods is spreading
‘I feel utter anger’: From Canada to Europe, a movement to boycott US goods is spreading.
The renowned German classical violinist Christian Tetzlaff was blunt in explaining why he and his quartet have cancelled a summer tour of the US.
“There seems to be a quietness or denial about what’s going on,” Tetzlaff said, describing his horror at the authoritarian polices of Donald Trump and the response of US elites to the country’s growing democratic crisis.
I feel utter anger. I cannot go on with this feeling inside. I cannot just go and play a tour of beautiful concerts.
Tetzlaff is not alone in acting on his disquiet. A growing international move to boycott the US is spreading from Scandinavia to Canada to the UK and beyond as consumers turn against US goods.
Most prominent so far has been the rejection by European car buyers of the Teslas produced by Elon Musk, now a prominent figure in Trump’s administration as the head of the “department of government efficiency” a special group created by Trump that has contributed to the precipitous declines in Tesla’s share price. About 15% of its value was wiped out on Monday alone.
The fall in Tesla sales in Europe has been well documented, as has a Canadian consumer boycott in response to trade tariffs and Trump’s calls for Canada to become America’s 51st state, but the past week has seen daily reports of cultural and other forms of boycotts and disinvestment.
Germany, Ireland and Italy likely to be hit hardest by US tariffs
Lisa O’Carroll
Only three EU countries operate a goods trade surplus with the US – Germany, Ireland and Italy – and are likely to be hit hardest by the US tariffs.
Germany’s trade surplus in goods was €57bn in 2023, according to official US data. In 2023, Germany sold€144bn worth of goods to the US. German made cars accounted for €22bn of that with live medical products including vaccines, blood, antisera and cultures accounting for another €11.4bn.
The US sold €87bn worth of goods to Germany including €8.25bn worth of cars.
Ireland has the second largest trade imbalance, a surplus of €50bn, according to official data for 2023, driven largely by the export of pharmaceuticals to the US from large US multinationals manufacturing in Ireland such as Pfizer. Agricultural products including butter are another big export.
In third place in 2023 was Italy which has a trade surplus was €41bn, selling about €65bn worth of goods to the US. Packaged medicines, cars accounted for about €5bn and €4.66bn of all exports respectively.
US exports to Italy, were worth about €24bn in 2023, dominated by crude oil, hormones and gas, according to official US data.
The UK’s GMB union says the tariffs are “potentially disastrous for all sides”.
Charlotte Brumpton-Childs, GMB national officer, said:
The USA gains nothing and in many instances will be undermining its own manufacturing industry.
There are shipments currently in the Atlantic, delayed by bad weather that could be subject to tariffs that weren’t planned to be.
The government is using all levers available and GMB is still hopeful we can get a common sense outcome.
We must not take our eye off the EU and their response to tariffs which could further compound the pressure the UK industry will face.
