Trump Expands Trade Threats in Global Game of Chicken

For the second time this week, President Trump has threatened to disrupt commerce with a detailed ally for retaliating in a commerce conflict that he began — a tactic that might result in compromise, or to financial spats that spiral additional uncontrolled.

On Thursday morning, Mr. Trump tried to cow the European Union into submission, threatening in a social media post to place a 200 % tariff on European wine and Champagne until the bloc dropped a 50 % tariff on U.S. whiskey. The European Union had imposed that tariff in response to levies that Mr. Trump placed on international metal and aluminum on Wednesday.

Mr. Trump deployed an analogous tactic towards Canada on Tuesday, threatening to double 25 % tariffs on Canadian metal and aluminum to attempt to get Ontario to carry a surcharge on electrical energy offered to the United States. The province had imposed the cost after Mr. Trump put different tariffs on Canada this month.

After Ontario suspended its surcharge, Mr. Trump walked again his threats.

Over the final a number of weeks, Mr. Trump has presided over a complicated and doubtlessly economically devastating forwards and backwards of tariffs and tariff threats, enjoying a worldwide recreation of hen as he tries to get a few of the United States’ closest allies and buying and selling companions to again down.

Mr. Trump has wielded the tariff threats with out regard for his or her financial penalties and, more and more, seemingly with out regard for the impression on inventory markets. The S&P 500 slumped once more on Thursday after Mr. Trump threatened Europe and reiterated on the White House that he would impose massive tariffs.

When requested whether or not he may relent on Canada, which despatched a delegation to the United States on Thursday to attempt to calm commerce tensions, Mr. Trump mentioned: “I’m not going to bend at all.”

He mentioned the United States didn’t want imports like lumber and power from Canada, one among America’s largest buying and selling companions. “We don’t need anything they have,” he mentioned.

The president, who spoke to reporters throughout a gathering with Mark Rutte, the secretary common of the North Atlantic Treaty Organization, acknowledged that his tariffs might trigger “a little disruption” however mentioned that “it won’t be very long.”

“And we have to do this,” he mentioned. “I’m sorry, we have to do this.”

Treasury Secretary Scott Bessent, requested on Thursday about market volatility and the financial results of tariffs, mentioned the White House was not involved “about the short term.”

“We’ve got strategic industries we’ve got to have,” Mr. Bessent mentioned. “We want to protect the American worker.”

Commerce Secretary Howard Lutnick additionally warned different nations towards retaliating towards the United States, saying in an interview on Bloomberg TV on Thursday that Mr. Trump might reply temperamentally.

“If you make him unhappy, he responds unhappy,” Mr. Lutnick mentioned.

Mr. Lutnick mentioned some nations, like Britain and Mexico, had thoughtfully examined how they did enterprise with the United States. But for nations that reply with additional tariffs, “the president’s going to deal with them with strength and with power,” he threatened.

It stays to be seen whether or not different nations will retaliate with their very own levies and, in that case, what number of financial disagreements could spiral into true tit-for-tat commerce wars. Mr. Trump has promised extra levies on automobiles and different merchandise to return in April.

Some governments, like these in Australia, Brazil, Britain, Japan and Mexico, have chosen to not retaliate for now, as they fight different routes to defuse tensions with Mr. Trump. But China, the European Union and Canada have all made completely different calculations.

Those governments could also be inspired by home political constituencies to face as much as Mr. Trump’s bullying or, within the case of Europe and China, emboldened by the scale of their economies.

Some European officers mentioned they wouldn’t bow to strain. In a press release on Wednesday, Ursula von der Leyen, the president of the European Commission, the bloc’s govt arm, mentioned that Europe wanted to behave to “protect consumers and business” and that it might take “strong but proportionate” countermeasures.

“We will not give in to threats,” Laurent Saint-Martin, France’s overseas commerce minister, said in a post on X. Mr. Trump “is escalating the trade war he chose to unleash,” he added.

Canadian officers have additionally usually been outspoken towards the United States, a dynamic which may be amplified by a political transition and an upcoming federal election in Canada.

“If you hit us, we will hit back,” Chrystia Freeland, a former Canadian minister of finance, mentioned in an interview on CNN on Thursday. Ms. Freeland mentioned that Canada was small however that it had leverage within the financial relationship as a result of it was the most important export marketplace for the United States by far.

“Canada is a more important export market for the U.S. than China, Japan, the U.K. and France combined,” she mentioned. “You guys are the country that invented the phrase ‘the customer is always right.’ Well, we’re your biggest customer.”

Mr. Trump could also be playing on the concept different nations are extra depending on the U.S. market than the United States is on them. Canada sends about 80 % of its exports to the United States, whereas roughly 17 % of U.S. exports go to Canada.

But being bigger and extra distant, the European Union and China are much less reliant on American patrons. The United States is the vacation spot for about 20 % of E.U. exports and about 15 % of Chinese exports.

On Thursday, Canada initiated a dispute on the World Trade Organization over the metal and aluminum tariffs that Mr. Trump had imposed the day earlier than. China initiated a swimsuit over a separate tranche of tariffs final month. But the W.T.O. challenges are largely a symbolic gesture, because the United States disabled the organization’s dispute settlement system in Mr. Trump’s first time period.

Canadian officers had been anticipated to fulfill with Mr. Lutnick to debate commerce points on Thursday. A European spokesman mentioned Maros Sefcovic, the European Union’s commerce commissioner, would speak with each Mr. Lutnick and Jamieson Greer, the U.S. commerce consultant, on Friday.

Jeanna Smialek and Matina Stevis-Gridneff contributed reporting.