by Shang Jingnan
On February 10, former U.S. President Donald Trump signed an executive order imposing a 25% tariff on all imported steel and aluminum products. This decision revokes previous tariff exemptions granted to Canada, Mexico, the European Union, and Japan, which had received limited exemptions since April 2022 under the Biden administration. The White House Press Secretary explained that these new tariffs would be added to existing ones, meaning that if a product previously had a 10% tariff, the new rate would increase to 35%, making the impact on non-exempt countries even more severe.
Canada and Mexico Shocked as Tariff Hammer Falls
Eight years ago, during Trump's first presidency, he imposed 25% tariffs on steel and 10% on aluminum to support struggling American manufacturers. By 2019, U.S. steel production had exceeded 80% capacity, and the American Iron and Steel Institute welcomed the policy.
However, trade data shows that Canada and Mexico are the biggest suppliers of steel and aluminum to the U.S.. Canada alone accounts for 25% of all U.S. steel imports and an astonishing 79% of aluminum imports in the first 11 months of 2024. While Mexico's steel and aluminum exports to the U.S. are lower in volume than Canada's, the United States remains Mexico's largest export market, with exports exceeding $13.288 billion in 2023. For both nations, imposing a 25% tariff is a devastating economic blow, akin to a dagger to the heart of their industries.
The sound of Ottawa's and Mexico City's protests shattered against Washington's walls as tariffs slashed through the North American trade landscape like razor-sharp knives, cutting deep into the economies of Canada and Mexico.
Trudeau's Desperation: Is There Any Way Out?
On February 1, Trump first announced the tariff hike, prompting Canada and Mexico to plead for exemptions, offering concessions in return. Trump agreed to delay implementation until March 1, but the tariffs were reinstated in full less than ten days later. Canadian Prime Minister Justin Trudeau, who had personally traveled to Trump's Mar-a-Lago estate to negotiate, was blindsided by the sudden reversal.
On February 7, during a closed-door meeting, Trudeau deliberately allowed the media to overhear him expressing concerns that Trump is serious about annexing Canada. He outlined four key reasons why Trump might pursue Canada's integration into the U.S. as its 51st state: Trump's awareness of Canada's vast natural resources, his deep understanding of U.S.-Canada border agreements, his leverage over Canadian airspace through NORAD (North American Aerospace Defense Command), and the support of Trump's Cabinet members for the idea of absorbing Canada into the United States.
Just two days later, on February 9, Trump publicly confirmed that he was "serious" about integrating Canada into the U.S.. After years as Canada's leader, Trudeau may have finally assessed Trump correctly—but it might already be too late. In today's world, national strength is measured by power, and for Canada, which relies on the U.S. for over 70% of its trade, its unwavering loyalty to Washington has proven futile.
Steel and Aluminum Tariffs Shake Global Trade
Trump's tariffs do not just target Canada and Mexico; they also deal a heavy blow to the European Union, the United Kingdom, and Japan.
Through a spokesperson, British Prime Minister Keir Starmer stated that the UK is committed to supporting its steel industry and has a deep, balanced trade relationship with the U.S.. This suggests the British government hopes for a special exemption—a "golden ticket" from Trump's tariffs. However, the UK Steel Association is far less optimistic, warning that a 25% tariff would devastate the struggling UK steel industry. With the U.S. being the UK's second-largest steel export market, accounting for 10% of total exports, this tariff could cripple the sector and push it further into decline.
The European Union, another key affected party, also exports 25% of its steel products to the U.S.. During Trump's first presidency, Brussels responded with retaliatory tariffs, securing partial exemptions as a result. However, today's EU faces greater challenges than it did eight years ago. The Russia-Ukraine war has dragged on for three years, weighing heavily on European economies, while inflation continues to surge and political leadership remains fragmented. Whether the EU can muster the strength to resist Trump's trade war as it did before remains highly uncertain.
Japan, too, is facing a major setback. Newly elected Prime Minister Shigeru Ishiba had just returned from a high-profile visit to Washington, hoping to strengthen U.S.-Japan ties. Instead, his government was met with disastrous news: the removal of Japan's 1.25 million-ton steel export exemption, meaning that Japanese steel will now face a full 25% tariff. This decision is an economic and political crisis for Ishiba's administration, which lacks a parliamentary majority.
Trump's tariff hikes will likely increase U.S. inflation and serve his broader economic and political strategy. Higher tariffs generate more government revenue, particularly from profitable automotive and defense manufacturing industries. His "America First" agenda prioritizes domestic industry growth, even at the cost of diplomatic tensions with key allies.
Whether this is a negotiation tactic or a fundamental part of Trump's MAGA strategy, one thing is certain: Trump's unpredictable trade policies have left U.S. allies in a state of constant anxiety. Nations that once considered themselves America's closest partners are now realizing that loyalty to Washington does not guarantee economic security. As Trump's policies reshape global trade, allied governments are left scrambling for solutions, knowing another trade war could be around the corner.
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