For the second time this week, President Trump threatened to disrupt trade with close allies in retaliation in the trade war he began. This could lead to tactics that could lead to compromises, or even economic impulses that have become out of control.
On Thursday morning, Trump tried to subjugate the European Union, threatening him with a social media post, putting a 200% tariff on European wine and champagne unless the Bullock drops 50% tariff on US whiskey. The European Union had imposed tariffs on Wednesday in response to Trump's global steel and aluminum-fitting tax.
Trump on Tuesday deployed a similar tactic against Canada, threatening to double the 25% tariff on Canada's steel and aluminum, and attempting to lift an additional fee for electricity sold to the US to Ontario. The state had been leviing charges after Trump put other tariffs on Canada this month.
Trump regained the threat after Ontario suspended additional fees.
Over the past few weeks, Trump has played a global game of chickens trying to govern confusing and potentially economically catastrophic tariffs and tariff threats and retreat some of the US's closest allies and trading partners.
Trump exercised tariff threats without considering economic impact, increasingly appearing without considering the impact on the stock market. The S&P 500 fell again on Thursday after Trump repeatedly threatened Europe and imposed major tariffs at the White House.
When asked if he might be tolerant of Canada, it sent a delegation to the US on Thursday to try to calm trade tensions, Trump said: “I'm not going to bend at all.”
He said there is no need to import timber, energy and other things from Canada, one of America's biggest trading partners. “We don't need what they have,” he said.
Speaking to reporters during a meeting with Mark Latte, executive director of the North Atlantic Treaty Agency, the president acknowledged that his tariffs could cause “a bit of confusion,” but said “it's not too long.”
“And we have to do this,” he said. “Sorry, I have to do this.”
Treasury Secretary Scott Bescent on Thursday asked about the volatility in the market and the economic impact of tariffs, saying the White House is not worried “about the short term.”
“We have a strategic industry that we have,” Becent said. “We want to protect American workers.”
Commerce Secretary Howard Lutnick also warned other countries against retaliation against the US, saying in an interview on Bloomberg TV on Thursday that Trump could respond to his temperament.
“If you make him unhappy, he will respond to unhappiness,” Rutnick said.
Rutnick said some countries, like the UK and Mexico, had thoughtfully looked into how they did business with the US. But he threatened that for the nation that responds with further tariffs, “the president will deal with power and power on them.”
It remains to be seen whether other countries will retaliate with their own taxes. If so, then how many economic inconsistencies could swirl into a true trade war. Trump has made more promises to collect cars and other products coming in April.
Some governments, such as those in Australia, Brazil, the UK, Japan and Mexico, have chosen not to retaliate for now, as they try other routes to ease tensions with Trump. But China, the European Union and Canada are all doing different calculations.
These governments may be encouraged by domestic political districts to encourage Trump bullying, or, in the case of Europe and China, the size of their economy.
Some European officials said they would not put any pressure on them. In a statement Wednesday, European Commission President Ursula von der Leyen, Bullock's executive arm, said Europe needs to act to “protect consumers and businesses” and requires “strong but proportional” measures.
“We will not succumb to the threat,” French Minister of Foreign Trade Laurent Saint-Martin said in a post in X.
Canadian officials have generally been spoken openly to the US. This is a dynamic that could be amplified by the political transition and future federal elections in Canada.
“If you hit us, we'll fight back,” Christia Freeland, former Canadian finance minister, said in an interview with CNN on Thursday. Freeland said Canada is small but it was the largest export market for the US, so there was leverage in economic relations.
“Canada is a more important US export market than China, Japan, the UK and France combined,” she said. “You're the country that invented the phrase “customers are always right.” Well, we are your biggest customer. ”
Trump may be gambling about the idea that other countries rely on the US market rather than they are. Canada sends about 80% of its exports to the United States, and approximately 17% of its exports to Canada.
However, the European Union and China are bigger and farther apart, and therefore do not rely on American buyers. The US is about 20% of EU exports and about 15% of China's exports.
On Thursday, Canada launched a dispute at the World Trade Organization over steel and aluminum tariffs that Trump imposed the day before. China launched a lawsuit last month through an independent tariff tranch. But the WTO challenge is primarily symbolic gestures as the United States overturned the organization's conflict resolution system in Trump's first term.
Canadian officials were expected to meet with Rutnick on Thursday to discuss trade issues. A European spokesman said European Union trade commissioner Maros Sevkovic will speak on Friday with both Rutnick and US trade representative Jamieson Greer.
Jeanna Smialek and Matina Stevis-Gridneff Reports of contributions.
