Donald Trump escalated global trade tensions by threatening additional tariffs on European Union (EU) goods if the bloc follows through on its planned counter-tariffs. This comes after the U.S. imposed a 25% duty on steel and aluminum imports, sparking retaliation from key trade partners.

Canada, the largest foreign supplier of these metals to the U.S., announced equivalent tariffs on American goods worth $20 billion, including computers and sports equipment. Canada's Finance Minister Dominic LeBlanc vowed not to "stand idly by" as the nation's industries face unfair targeting. The country also cut interest rates to brace for economic disruption.

Trump's tariff policies have rattled investor confidence, raising recession fears. A Reuters/Ipsos poll revealed that 57% of Americans view his approach as erratic, while 70% expect higher consumer prices. Despite this, U.S. steel producers welcomed the move, arguing that previous tariffs had been weakened by exemptions.

The EU, less exposed to these measures, is preparing countermeasures on $28 billion worth of U.S. products, including bourbon, diamonds, and bathrobes. EU Commission President Ursula von der Leyen stressed that excessive tariffs harm both economies. Meanwhile, China and Japan warned of economic repercussions, and allies like Britain and Australia criticized the move but ruled out immediate retaliation.

The ongoing trade war has unsettled global markets. Luxury car and chemical manufacturers warned of economic strain, while German sportswear brand Puma saw its stock plunge nearly 25% due to concerns over reduced American spending.

Meanwhile, U.S.-Canada relations remain tense. As Prime Minister Justin Trudeau prepares to step down, successor Mark Carney signaled a willingness to negotiate with Trump but emphasized Canada's sovereignty. The growing friction has led to anti-U.S. sentiment, with Canadian retailers pulling American products and travel bookings to the U.S. declining by 20%.