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Businesses warn tariffs would be felt across supply chain

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New tariffs scheduled to take effect on March 12

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EU plans countermeasures, may reactivate 2018 tariffs

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Mexico does not forecast retaliatory measures

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Canada to defend against tariffs, highlights negative

impact on

trade

By Andrea Shalal and Philip Blenkinsop

WASHINGTON/BRUSSELS, Feb 11 (Reuters) - Mexico, Canada

and the European Union on Tuesday condemned U.S. President

Donald Trump's decision to impose tariffs on all steel and

aluminum imports next month, a move that has fanned fears of a

trade war as business and political leaders braced for yet more

trade duty announcements from the new administration.

Businesses around the United States also warned of fallout

from the tariffs, with many manufacturing-heavy companies

finding it difficult to plan next steps or determine if Trump

will follow through. The tariff hike would reverberate across

the supply chain, affecting all businesses that rely on the

materials, they said.

Trump signed proclamations late on Monday raising the

U.S. tariff rate on aluminum to 25% from his previous 10% rate

and eliminating country exceptions and quota deals as well as

hundreds of thousands of product-specific tariff exclusions for

both metals.

The measures, due to take effect on March 12, will apply to

millions of tons of steel and aluminum imports from Canada,

Brazil, Mexico, South Korea and other countries that had been

entering the U.S. duty free under the carve-outs.

Mexican Economy Minister Marcelo Ebrard called the tariff

decision "not justified" and "unfair." He did not say if Mexico

planned reciprocal tariffs on steel or aluminum it imports from

the United States.

Canadian Prime Minister Justin Trudeau said the tariffs were

"unacceptable." Canada's response, if needed, would be firm and

clear, he said at an artificial intelligence summit in Paris.

European Commission President Ursula von der Leyen joined

the condemnation, saying the 27-nation bloc would take "firm and

proportionate countermeasures." U.S. Vice President JD Vance

said he would discuss trade and economic issues with Von der

Leyen at an AI summit in Paris on Tuesday.

The move will simplify tariffs on the metals, Trump told

reporters. "It's 25% without exceptions or exemptions," he said.

"That's all countries, no matter where it comes from, all

countries."

Trump said on Monday he would announce reciprocal tariffs

over the next two days on all countries that impose duties on

U.S. goods, and said he was also looking at tariffs on cars,

semiconductors and pharmaceuticals.

Asked about threats of retaliation by other countries

against his new tariffs, Trump said, "I don't mind."

No updated guidance on timing for those had been provided by

the White House by Tuesday afternoon.

READY TO RETALIATE

European Commission head von der Leyen said she deeply

regretted the U.S. decision, adding that tariffs were taxes that

were bad for business and worse for consumers. EU steel exports

to the U.S. have averaged about 3 billion euros ($3.1 billion) a

year over the past decade.

"Unjustified tariffs on the EU will not go unanswered - they

will trigger firm and proportionate countermeasures," she said

in a statement.

One option for the EU would be to reactivate the tariffs it

imposed in 2018 during Trump's first term, which were suspended

under an agreement with his predecessor, President Joe Biden.

The EU tariffs on U.S. products such as bourbon, motorcycles

and orange juice are currently suspended until the end of March.

The American Chamber of Commerce to the EU (AmCham EU),

representing U.S. companies active in Europe, also criticised

the move as harmful to jobs, prosperity and security on both

sides of the Atlantic.

"The damage will extend beyond just the steel and aluminum

sectors, impacting all businesses that rely on these materials

throughout the supply chain," it said in a statement.

COST AND CHAOS

Executives across industries reliant on steel and

aluminum imports were

scrambling

to offset the cost of Trump's move after previous tariff

threats from the White House that were later scrapped.

Companies ranging from Coca-Cola and Ford to smaller

aluminum, aerospace and appliance firms expect to be affected by

Trump's moves, which Ford CEO Jim Farley said have so far added

"a lot of cost and a lot of chaos" to American business.

The Coalition of American Metal Manufacturers and Users

(CAMMU) said failure to include a workable exclusion process

would hurt U.S. manufacturers, and especially small- and

medium-sized businesses that were left paying significantly more

for inputs to their production.

"Foreign customers are shifting their supply chains away

from U.S. producers. Once removed, especially for smaller,

family-owned businesses, it is difficult to regain that lost

business," the group said.

It said the threat of retaliatory tariffs from key

trading partners further threatened U.S. exports and

manufacturing jobs, stalling expansion plans and teeing up

difficult choices on investments, retention and long-term

growth.

Steel imports accounted for about 23% of American steel

consumption in 2023, according to American Iron and Steel

Institute data, with Canada, Brazil and Mexico the largest

suppliers.

Canada accounted for nearly 80% of U.S. primary aluminum

imports in 2024.

Trump also will impose a new North American standard

requiring steel imports to be "melted and poured" and aluminum

to be "smelted and cast" within the region to curb U.S. imports

of minimally processed Chinese and Russian metals that

circumvent other tariffs.

While China exports only tiny volumes of steel to the U.S.,

it is responsible for much of the world's excess steel capacity,

according to the U.S. It says subsidised production in China

forces other countries to export more and leads to

trans-shipment of Chinese steel through other countries into the

U.S. to avoid tariffs and other trade restrictions.

($1 = 0.9684 euros)