Trump Slaps 50% Tariff On Canadian Steel & Aluminum, Threatens Auto Industry

President Donald Trump announced plans Tuesday morning to impose an additional 25% tariff on steel and aluminum imports from Canada, bringing the total levy to 50%.

What To Know: Trump made the statement on his Truth Social platform, accusing Canada of being one of the most protectionist economies in the world. The new tariffs are set to take effect on Wednesday.

Trump also warned that if Canada does not remove its existing tariffs, he will significantly raise duties on cars imported from the country, a move he claims would cripple Canada's automotive sector.

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US industries that rely on Canadian steel and aluminum—such as automotive, construction and aerospace—could face rising production costs, which may be passed on to consumers in the form of higher prices for cars, appliances, and infrastructure projects.

Supply chain disruptions could also increase volatility in commodity markets, further straining businesses that depend on stable material costs.

What Else: Wall Street is anxiously awaiting Wednesday's inflation report, hoping for signs of cooling price pressures amid mounting recession fears and a sharp market sell-off, with the Nasdaq 100 plunging 13% in just three weeks.

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Economists expect headline inflation to ease slightly to 2.9%, but persistent cost increases in key areas like car insurance and airfare may keep the Federal Reserve from cutting rates too soon. Meanwhile, the Atlanta Fed now predicts a 2.4% GDP contraction for first-quarter 2025, as trade imbalances widen and tech stocks continue their sharp decline.

Analysts warn that proposed tariff hikes could further disrupt supply chains and fuel inflation, potentially offsetting disinflationary trends. Businesses may have already accelerated imports in anticipation of these tariffs, contributing to the recent economic slowdown.

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