Trade Tensions Escalate as E.U. and Canada Hit Back at U.S. Tariffs

Mon Jul 07 2025 14:47:24 GMT+0300 (Eastern European Summer Time)
Trade Tensions Escalate as E.U. and Canada Hit Back at U.S. Tariffs

A deepening trade war sees the E.U. and Canada retaliate against the U.S. with significant tariffs, while some allies opt for restrained approaches.


The E.U. and Canada have announced retaliatory tariffs amounting to billions against U.S. exports following President Trump's imposition of steel and aluminum tariffs. Meanwhile, other allies like the U.K. and Australia are choosing not to engage in reciprocal measures.


The trade landscape shifted dramatically yesterday as the European Union (E.U.) and Canada unveiled a series of retaliatory tariffs on U.S. exports, escalating a confrontation triggered by President Trump's recent steel and aluminum levies. The E.U. is set to implement its tariffs on April 1, responding to approximately $26 billion in tariffs that the U.S. has placed on its products. European officials have indicated, though, that they remain open to negotiations.

The E.U.’s response will unfold in two phases. Initially, a suspension of tariffs that had been put in place under President Joe Biden will expire, leading to increased tariffs on a range of products valued in the billions of euros, targeting items such as boats, bourbon, and motorcycles. Following this, additional tariffs on around 18 billion euros' worth of products will be established, although the specific items involved in this second round of tariffs are yet to be determined.

On the other side of the Atlantic, the Canadian government announced its decision to impose fresh tariffs worth $20 billion on various U.S. imports. This action primarily focuses on steel and aluminum, but it will extend to tools, computers, sporting goods, and cast iron items as well.

Meanwhile, not all allies are joining in on the retaliation. U.K. Prime Minister Keir Starmer has opted not to introduce countermeasures, instead aiming for a long-term trade agreement with the U.S. Similarly, Australian Prime Minister Anthony Albanese has opted to refrain from reciprocal tariffs, noting the potential negative effects on Australian consumers.

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