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E-mail Xinhua, March 13, 2025
WASHINGTON, March 13 (Xinhua) -- Criticism flooded in from U.S. allies and major trade partners as Washington placed 25 percent tariffs on steel and aluminum imports on Wednesday.
As "uncertainty" has become a media buzzword, political leaders and analysts worldwide warned of the economic and geopolitical damage the tariffs could bring to the world, putting businesses and jobs at stake.
GLOBAL CRITICISM
Canada, the largest supplier of steel and aluminum to the United States, was among the harshest critics of U.S. tariffs.
Incoming Prime Minister Mark Carney accused Washington of trying to weaken the Canadian economy with "unjustified tariffs," calling the United States "a country we can no longer trust."
The tariffs have already begun to take a toll on the country. The Bank of Canada cut interest rates and warned of potential economic turmoil. "We're now facing a new crisis," said Governor Tiff Macklem.
"Depending on the extent and duration of new U.S. tariffs, the economic impact could be severe," he added. "The uncertainty alone is already causing harm."
Meanwhile, the tariffs are also putting jobs on the line. Algoma, one of the largest Canadian steel companies, laid off 20 workers in anticipation of the tariffs and their potential financial fallout, the Toronto Star reported.
"Today is a difficult day for Canada and the industry because of these unjustified tariffs that have been put on," Carney said Wednesday.
Also among the top U.S. suppliers of steel, Mexico could see its economy shrink 0.2 percent in 2025 due to the tariffs and their impact on demand, credit rating agency Moody's warned Wednesday.
The Mexican peso will be subject to depreciation pressures caused by the return of "risk aversion, financial volatility and uncertainty about the business climate," delaying investment in nearshoring and putting domestic investment decisions on hold, it added.
Mexican Economy Minister Marcelo Ebrard described the tariffs as "unfair," noting that Mexico's steel exports to the United States had been declining since 2022, while imports of U.S. steel had grown. So, it now "imports more steel from the United States than it exports."
The European Union (EU) voiced strong opposition as well. European Commission President Ursula von der Leyen also denounced the tariffs as "unjustified," as the EU could lose up to 3.7 million tons of steel exports, according to the European steel association Eurofer.
"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," she said.
DOMESTIC OBJECTIONS
Besides warning that the tariffs will place great strain on "already tense transatlantic relations," U.S. media and economists are also worried that the trade fight will dent economic growth and lift U.S. consumer prices.
CNN called the steel and aluminum tariffs a "risky bet." It said in a Wednesday report: "Although it could give America's steel and aluminum industries a boost, it will raise prices on a key ingredient for American manufacturers, which could be passed on to consumers. The costs could outweigh the benefit."
Citing what happened during Donald Trump's first presidency, CNN pointed out that his 2018 metals tariffs drove up costs for cars, tools and machinery, shrinking the output of those industries by more than 3 billion U.S. dollars in 2021.
The tariffs could thus backfire on the very industries they aim to protect. William Oplinger, CEO of Alcoa, one of the largest U.S. aluminum producers, warned recently that as the tariffs raise production costs, they could lead to the loss of around 100,000 jobs, including 20,000 in the aluminum industry.
"While we're very supportive of their efforts to improve the industry as well as strengthen U.S. manufacturing jobs, we do see that there could be some harm from the tariffs," Alcoa Chief Financial Officer Molly Beerman said at a JPMorgan industry conference on Wednesday.
Meanwhile, economists pointed out that the uncertainty brought by the tariffs has caused significant market volatility.
The S&P 500 recorded its most significant one-day drop on Monday since last December, wiping out 4 trillion dollars from the S&P 500's peak last month.
"The U.S. exceptionalism trade has been experiencing turbulence over the last two weeks as policy uncertainty rose sharply at a time of a budding growth scare and crowded investor positioning," said JPMorgan analyst Dubravko Lakos-Bujas.
A Reuters/Ipsos poll that closed on Wednesday shows that over half of Americans believe that Trump's economic policies are "too erratic" and his "aggressive" tariff moves are spooking investors.
"We've seen clearly a big sentiment shift," said Ayako Yoshioka, a senior investment strategist at Wealth Enhancement. "A lot of what has worked is not working now."
Echoing her view, Luca Paolini, chief strategist at Pictet Asset Management said, "Investors are starting to think the U.S. administration is losing control of the narrative." Enditem
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