U.S. President Donald Trump’s new tariffs on steel and aluminum came into effect today, the latest front in a growing trade war that’s rocked markets and disappointed allies.
U.S. steel and aluminum imports are now subject to a 25% tariff, and allies like Australia, which had hoped to get exemptions, were disappointed. Australian Prime Minister Anthony Albanese blasted the tariffs as “a form of economic self-harm” and “against the spirit of our two nations’ enduring friendship.”
The White House’s response? If Australian steelmakers “want to be exempted, they should consider moving steel manufacturing here,” press secretary Karoline Leavitt told Australian media.
That’s leaving governments around the world to wonder what else is coming—and which country might get hit next with a White House tariff broadside. The Trump administration still plans to impose reciprocal tariffs on a country-by-country basis in April, based on what officials deem to be tariff- and non-tariff barriers to U.S. trade.
“Many of us here in Asia watch with anxiety President Donald Trump’s tariffs on the U.S.’s largest trading partners, and his plans for more,” Singapore Deputy Prime Minister Gan Kim Yong told the audience at CNBC’s Converge Live event on Wednesday. A revived trade war, with countries slapping tariffs and retaliatory measures back and forth, will “significantly set back the growth of the global economy,” he said.
U.S. markets have been battered since Trump started to roll out his tariff plans. The S&P 500 is down 5.1% for the year, and erased all its gains from the past six months.
Markets in Asian U.S. allies have also been hit. Japan’s Nikkei 225 is down 6% since the beginning of the year, while Australia’s S&P/ASX 200 is down 5.1%. Indexes in India—once seen as a potential beneficiary of U.S.-China conflict—are also down more than 5% for the year.
Stocks in one Asian market are rallying, however. Hong Kong’s Hang Seng Index is up over 20% for the year, as investors reassess China’s growth prospects in the wake of DeepSeek’s AI models and the promise of more government economic support.
What tariffs has Trump imposed so far?
In addition to the new taxes on steel and aluminum, the U.S. has also imposed tariffs of 25% on imports from Canada and Mexico, as well as an additional 20% tariff on imports from China.
On Tuesday, Trump angrily proposed raising steel and aluminum tariffs on Canada to 50%, only to rescind the threat hours later.
Canada, China, Mexico, and the European Union have all imposed, or promised to impose, retaliatory tariffs on the U.S.
China’s retaliatory tariffs on U.S. farm products—which can reach up to 15% on goods like cotton, soybeans, and chicken—went into effect on Monday. Beijing has also imposed retaliatory tariffs on U.S. oil, gas, and agricultural machinery.
Who’s next?
In a Tuesday press conference, the White House pointed to several instances of countries that impose relatively higher tariffs, alleging that India charges a 150% tariff on U.S. alcohol, and that Japan imposes a 700% tariff on imported rice. (Kenichi Kawasaki, a professor at Japan’s National Graduate Institute for Policy Studies, suggested to Bloomberg that the country’s rice tariffs were closer to 200%.)
“All [Trump] is asking for at the end of the day are fair and balanced trade practices,” Leavitt told reporters.
Economists worry that countries that maintain large trade surpluses with the U.S. could get hit next. Several countries benefited from Trump’s first trade war during his previous term when Chinese manufacturing shifted their supply chains to avoid the U.S. president’s tariffs.
Vietnam, which derives almost a quarter of its GDP from U.S. exports, is high on economists’ list of countries at risk from Trump tariffs. The Southeast Asian country, now a hub for electronics manufacturing, had the fourth-largest trade surplus with the U.S., behind China, Mexico, and the European Union.
What about China?
The Trump trade war poses a challenge to Beijing, which is trying to bolster a struggling domestic economy. China’s economy grew by 5% last year, thanks primarily to booming exports. But tariffs could upend that growth engine, and force Beijing to look inward for growth.
Still, China doesn’t rely quite as much on the U.S. as it used to. Writing on Feb. 21, HSBC chief Asia economist Frederic Neumann argued that U.S. tariffs would prove “a nuisance, to be sure, but hardly an existential issue.” U.S. exports, including reexports through other markets, only contribute about 2.5% of China’s GDP.
The real risk is if other countries follow suit, and impose their own tariffs on China. HSBC’s Neumann noted that exports to the “rest of the world” make up 12.5% of GDP.
Even if they might not go as far as the U.S.’s blanket tariffs on Chinese imports, governments are already considering barriers to hold off a flood of Chinese goods.
Last August, Indonesia reintroduced tariffs to protect its textile sector from cheap foreign clothes, particularly from China. A few months later, Brazil imposed tariffs on a range of Chinese imports, including iron and fiber-optic cables. The European Union and Canada also slapped tariffs on Chinese EVs.
Tariffs on China have kept rolling in since Trump took office. Vietnam and South Korea both imposed provisional tariffs on Chinese steel in late February. And last week, Mexico President Claudia Sheinbaum also agreed to review tariffs on Chinese imports.
“Against the backdrop of the extraordinary competitiveness of Chinese producers—arguably far more so than during the prior episode of U.S.-China tensions—the risk of a tariff cascade cannot be ignored,” HSBC’s Neumann wrote in February.
