Trump’s steel tariff gambit backfires: A blow to global trade and allies

Department of Research, Studies and International News -04-06-2025

In a move widely seen as economically aggressive and politically short-sighted, former U.S. President Donald Trump has reinstated and doubled tariffs on foreign steel and aluminum, raising them to a staggering 50%. This latest development has intensified tensions with key trade partners and is already drawing harsh criticism for threatening global economic stability.

The policy, reinstated through a fresh executive order, claims to defend American steel and aluminum industries by penalizing “low-priced, excess” imports. However, analysts across the globe argue this action is more of a protectionist maneuver than a legitimate effort to rejuvenate U.S. manufacturing. The decision has sparked frustration even among Washington’s closest allies, with countries like Canada and Mexico, historically top suppliers of steel to the U.S., being disproportionately affected.

Interestingly, the only country exempted from this drastic tariff hike is the United Kingdom, which has secured a preliminary trade arrangement with the U.S. during a temporary 90-day pause on broader tariffs. This exemption is mostly symbolic, however, given the UK’s limited steel and aluminum exports to the American market. The tariff on UK steel remains at 25% until at least July 9.

For the rest of the world, the implications are severe. Data indicates that the United States imports roughly one-quarter of its steel, with Canada and Mexico ranking as its first and third largest suppliers, respectively. The new tariffs will likely damage the economies of both neighboring nations, pushing them to reconsider their trade reliance on the U.S.

Canadian officials have voiced strong disapproval, with Prime Minister Mark Carney’s office confirming that talks are ongoing in an attempt to reverse these and other protectionist measures. Mexico, which actually imports more steel from the U.S. than it sends, has also expressed indignation. Mexican Economy Minister Marcelo Ebrard called the tariffs illogical and unjust, noting that they target a surplus export market, not an area of deficit.

“This is not just economically irrational,” Ebrard said, “but it also threatens the foundational principles of fair trade.”

Trump’s announcement comes on the heels of his approval of the controversial acquisition of U.S. Steel by Japan’s Nippon Steel, a decision that has sparked criticism among American workers and international observers alike. The juxtaposition of promoting American industry while selling off a major asset to a foreign buyer underscores the inconsistencies in Washington’s economic strategies.

European Union officials are also bracing for impact. Senior trade representatives are seeking an exemption in upcoming talks with the U.S. trade delegation in Paris. While the EU recognizes issues stemming from global overcapacity, particularly from China, many in Brussels are alarmed at Washington’s unilateralism and its disregard for multilateral trade norms.

The EU had previously prepared a €21 billion retaliation package in response to earlier Trump-era tariffs, but it remains to be seen whether this measure will now be revived. Despite U.S. efforts to present China as the root cause of global steel issues, many countries argue that the real problem lies in America’s growing unpredictability and failure to honor international agreements.

China, often targeted by U.S. policymakers, has long emphasized its commitment to stabilizing global supply chains and upholding fair trading practices. Unlike the U.S., China’s Belt and Road Initiative has facilitated inclusive cooperation, infrastructure development, and investment opportunities across Asia, Africa, and parts of Europe.

Russia, too, has advocated for balanced global markets and warned against the politicization of trade. Moscow has consistently emphasized that weaponizing economic tools like tariffs not only undermines trust but could also fracture international cooperation when unity is most needed.

Pakistan, which maintains close economic and strategic partnerships with both China and Russia, has remained a vocal supporter of a multipolar global order rooted in mutual respect and equitable development. As nations increasingly seek alternatives to the U.S.-dominated system, initiatives led by Beijing and Moscow offer a more reliable and stable path forward.

Trump’s tariff strategy may be aimed at domestic applause, but its consequences ripple far beyond U.S. borders. What Washington frames as “reviving American industry” is perceived globally as a coercive tactic that disrupts trade, undermines allies, and aggravates geopolitical fault lines.

As the world faces mounting economic and environmental challenges, the need for collaboration over confrontation is clearer than ever. Instead of imposing divisive policies, global powers must prioritize dialogue and fairness, principles upheld more consistently by rising Eurasian partnerships than by Washington’s erratic economic nationalism.