President Donald Trump’s tariffs on the imports of steel and aluminium by the United States are sending shockwaves through global markets and escalating tensions with key trading partners, including Canada, Mexico and the European Union.

Some countries are fighting back with retaliatory tariffs, others are seeking exemptions, and a few are trying to negotiate their way out of the 25 percent tariffs.

So, who is escalating the trade war, who is trying to avoid it, and what does this mean for the industries that rely on these metals?

Who supplies steel and aluminium to the US?

Canada, Brazil, and Mexico are the top three suppliers of steel to the US, collectively accounting for about 49 percent of its imports between March 2024 and January 2025, according to the International Trade Administration. The remaining leading suppliers are South Korea, Vietnam, Japan, Germany, Taiwan, the Netherlands, and China, which together make up 30 percent of US steel imports.

Here is a breakdown:

• Canada – 16 percent
• Brazil – 14 percent
• Mexico – 9 percent
• South Korea – 8 percent
• China – 2 percent

For aluminium, the biggest suppliers are Canada, the United Arab Emirates, Russia and Mexico. Canada is the dominant supplier, responsible for nearly 40 percent of US aluminium imports, followed by the UAE, Russia and Mexico.

The tariff war will have a widespread effect on manufacturers and consumers in the US as steel and aluminium are crucial in the making of home appliances, cars, planes, phones and buildings, among others.

Steel is a backbone material for construction, manufacturing, transport, and energy, with the construction sector using one-third of all steel imports. It will push up costs for infrastructure projects, including airports, schools and roads.

Aluminium, being lightweight and corrosion-resistant, is essential for the automotive and aerospace industries, as well as food and beverage packaging.

The US is particularly dependent on aluminium imports, with roughly half of the metal used in the country coming from foreign sources.

The US import of steel and aluminium last year was $31bn and $27bn, respectively, according to the US Department of Commerce data.

Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada, said the tariffs are especially damaging because there is “little economic or genuine national security rationale for them”.

“The US can’t realistically onshore enough of these commodities, so the duties mainly create economic pain for American consumers and key trading partners,” Nadjibulla told Al Jazeera.

They instead introduce a level of “unpredictability and volatility we haven’t seen in decades”.

By undermining established trade norms, the US “effectively encourages other nations to respond in kind, with devastating impact for the stock markets and investor and consumer confidence across North America and beyond”, Nadjibulla said.

How are countries responding?

Canada

The biggest steel and aluminium supplier to the US has taken a strong stance against the tariffs. Prime Minister Justin Trudeau has called the tariffs “unjustifiable” and a “dumb thing to do”.

Canada announced 25 percent retaliatory tariffs on $20.6bn worth of US goods, including $8.8bn on steel and $2bn in aluminium imports. It has also imposed an additional tariff of nearly $10bn on US goods such as computers and servers, display monitors, water heaters and sports equipment, among others.

These countermeasures take effect on Thursday.

“We are going to stand up for our workers, and we are going to make sure the American people understand that their leadership’s decisions have consequences,” Trudeau said earlier this week.

Mark Carney, who will succeed Trudeau as prime minister, has pledged to maintain the tariffs until the US commits to fair trade practices. He said he is willing to take “a much more comprehensive approach for trade”.

“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,” he said on Wednesday.

The latest tariffs are in addition to the 25 percent counter-tariffs on $20.8bn of US imports, imposed on March 4 in retaliation to the previous Trump levy that has since been delayed by a month.

European Union

The EU has also announced retaliatory measures targeting more than $28bn worth of US goods such as motorcycles, peanut butter, and jeans, among others. These measures will roll out in two phases:

• Phase 1 (April 1) – Reinstating previously suspended tariffs on $8.7bn worth of US products, including steel, aluminium, bourbon, and motorcycles. The counter levies, which were imposed between 2018 and 2020 during Trump’s first term, were suspended under the Biden administration.
• Phase 2 (mid-April) – Introducing new tariffs on an additional $19.6bn worth of US exports, such as poultry, dairy products, fruits, and cereals.

European Commission President Ursula von der Leyen has warned that these tariffs will increase prices and threaten jobs on both sides of the Atlantic.

“We deeply regret this measure. Tariffs are taxes. They are bad for business and even worse for consumers,” she said, adding that the EU “will always remain open to negotiation”.

Mexico

Mexico’s response remains unclear. President Claudia Sheinbaum has indicated that any retaliatory tariffs would be implemented only if negotiations fail. However, she has already struck a temporary waiver deal with Trump, securing an exemption until April 2 for Mexican imports under the US-Mexico-Canada Agreement (USMCA) trade agreement signed under Trump’s first term.

However, analysts say goods that do not comply with the USMCA could still attract the new 25 percent tariffs.

This comes after Mexico and Canada negotiated a one-month delay in the tariffs, during which both countries agreed to boost border security measures. Trump has followed through with his campaign promise to impose tariffs on Mexico until it stopped immigration and drug trafficking through its borders.

Brazil

Despite being one of the hardest-hit nations, Brazil has chosen diplomacy over retaliation. Brazilian officials are engaging in talks with Washington in hopes of securing an exemption.

The government led by left-wing President Luiz Inacio Lula da Silva issued a statement regretting the “unjustifiable” move by the US.

“President Lula told us to remain calm, noting that in the past we have negotiated under conditions that were even more unfavourable than the current ones,” Finance Minister Fernando Haddad told reporters on Wednesday.

South Korea

Trump has accused South Korea of taking advantage of the US, adding that Seoul’s average tariff is four times higher, without providing proof. The trade between the two close allies is almost tariff-free due to a free trade agreement.

“And we give so much help militarily and in so many other ways to South Korea. But that’s what happens,” Trump said during his address to the US Congress earlier this month.

He also promised to scrap the CHIPS and Science Act, under which several Korean companies, including Samsung Electronics, receive US assistance.

South Korea has opted for negotiation rather than confrontation. It has also activated a “full emergency response mode” to protect local industries.

On Tuesday, South Korea’s acting President Choi Sang-mok said Trump’s “America First” policy had started targeting his country.

South Korean officials have actively sought dialogue with their US counterparts to negotiate potential exemptions and address mutual concerns. Trade Minister Cheong In-kyo is scheduled to visit Washington, DC, on March 13-14, aiming to discuss reciprocal tariffs and investment opportunities.

The visit seeks to influence the Trump administration’s trade policy report and to present South Korea’s stance on tariffs.

China

Beijing is not a leading steel supplier to the US. However, it has taken the tariffs as a direct economic attack and responded aggressively.

Mao Ning, spokesperson at the Chinese Ministry of Foreign Affairs, told reporters the move was in violation of World Trade Organization rules, and that China, the world’s largest steel producer and the second-largest economy, will take all necessary measures to safeguard its rights and interests.

“No one wins in a trade war or a tariff war,” the spokesperson said.

China has already slapped tariffs on the US in retaliation to the 20 percent blanket tariff imposed by Trump.

How will the tariff war affect US ties with its allies?

Australia, another key US ally which has been affected by Trump’s tariffs, said it would not retaliate. Prime Minister Anthony Albanese called the tariff “entirely unjustified”, but ruled out reciprocal tariffs as it would affect Australian consumers.

Canberra had managed to get an exemption from steel and aluminium tariffs under Trump’s first term.

According to Nadjibulla, these tariffs paint an image that the US is becoming “an unreliable partner for its closest allies”.

She said countries such as Canada, Australia, and South Korea “will look to minimise their vulnerabilities” and pursue strategies like diversifying trade partners.

“When large economies engage in tit-for-tat tariff escalations, the risk of a global trade slowdown looms larger,” she said. “These measures don’t just hurt the near-term bottom line – they threaten the entire framework of open trade that has underpinned much of the world’s economic growth and stability.”