President Trump's plan to impose reciprocal tariffs on countries that tax US imports is causing worldwide concern about a global trade war. Businesses are struggling to adjust to the volatile trade landscape and are warning of price increases for consumers. The European Union is preparing to respond to Trump's tariffs, while steelmakers in Europe are worried about an influx of cheaper steel from other countries.
President Trump has promised to impose reciprocal tariffs on every country that charges duties on US imports, escalating fears of a widening global trade war . An aerial view of the ArcelorMittal Dofasco steel production facility in Hamilton, Ontario, Monday, February 10, 2025.
/ Photo: The Canadian Press via AP Supermarket group Ahold Delhaize and Siemens Energy said US import tariffs will lead to higher prices as they pass on the costs, while speciality steelmaker voestalpine urged Brussels to retaliate for duties threatened by Donald Trump. Executives around the world are scrambling to offset the cost of the US president's move to impose 25 percent tariffs on aluminium and steel and keep up with changing US trade policies that threaten to disrupt industries from autos to consumer goods to energy. On Wednesday, Trump's trade advisers were finalizing plans for the reciprocal tariffs the US president has vowed to impose on every country that charges duties on US imports, ratcheting up fears of a widening global trade war. Trade ministers of the 27-country European Union were preparing to meet later by videoconference to determine their response after European Commission President Ursula von der Leyen said moves against the bloc 'will not go unanswered'. Siemens Energy expects to take a hit from tariffs with its network in Mexico the most exposed to extra charges on power equipment supplies. CEO Christian Bruch said he could not quantify the impact, but that price increases would be passed on to customers, echoing comments from other executives in recent weeks. Trump's trade policy has dominated conference calls with media and investors during the fourth-quarter earnings season. Supermarket group Ahold Delhaize expects US tariffs on Mexico and Canada to lead to price increases for food and vegetables as well as paper products, group CEO Frans Muller told Reuters. The company which runs US chains including Food Lion, Stop & Shop, and Hannaford, is considering sourcing more products from the West Coast and states such as Florida, should Mexican products become less competitive, Muller added. 'If there would be tariffs on Mexican fruit and vegetables or Canadian paper products, then we will have an inflationary effect in those categories,' Muller said in an interview. European shares extended gains to hit a record high on Wednesday, showing some resilience to the uncertain global trade backdrop. Barclays' European equity strategists said on Wednesday the tariff threats are for now looking more like a negotiation tool, although there is still some risk for stocks exposed to tariffs and foreign exchange, such as autos and consumer staples. The bank's back-of-the-envelope calculations suggest European companies could take a 5-10 percent hit to earnings from 10 percent tariffs in a 'worst-case' scenario. Steelmakers in Europe are worried about a potential fresh flood of cheap steel into the EU as happened in 2018 under the first Trump presidency. Austrian speciality steelmaker voestalpine called on the European Union to take immediate countermeasures and start negotiations with the US regarding tariffs. French steelmaker Aperam on Tuesday called on Brussels to intervene to curb imports if US duties on all steel and aluminium imports prompt companies to ship more to the European Union instead. Chairman of Taiwan's Foxconn said the world's largest contract electronics manufacturer and Apple's main iPhone maker can adjust its production around new US tariffs
TRADE WAR TARIFFS GLOBAL ECONOMY US TRADE POLICY EUROPEAN UNION
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