The United States enacted new 25% tariffs Wednesday on all steel and aluminum imports, ending previous exemptions that had been in place for a number of U.S. allies.

The move affects imports from Argentina, Australia, Brazil, Britain, Canada, Japan, Mexico, South Korea and the European Union.

“In my judgment, these modifications are necessary to address the significantly increasing share of imports of steel articles and derivative steel articles from these sources, which threaten to impair U.S. national security,” U.S. President Donald Trump said in a proclamation announcing the tariffs.

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Australian Prime Minister Anthony Albanese called the U.S. action “entirely unjustified,” but ruled out imposing retaliatory tariffs.

“Tariffs and escalating trade tensions are a form of economic self-harm and a recipe for slower growth and higher inflation. They are paid by the consumers. This is why Australia will not be imposing reciprocal tariffs on the United States,” Albanese said Wednesday.

Canada was spared an even higher set of tariffs after Trump backed down from a threat to push duties on Canadian steel and aluminum to 50%.

Trump ignited an economic war last week with Canada, normally a staunch ally and the second biggest U.S. trading partner after Mexico, by first imposing and then delaying for a month a 25% tariff on all products exported to the United States. Trump said he is pressuring Canada to further curb the flow of migrants and illicit drugs, especially the deadly opioid fentanyl, into the United States.

Canada’s response included officials in Ontario province imposing a 25% levy on electricity sold to 1.5 million American customers, drawing Trump’s ire and the threat to increase the steel and aluminum tariffs.

U.S. and Canadian officials spoke Tuesday and agreed to reverse course, with Ontario canceling the electricity levy and the Trump administration dropping the steel and aluminum tariffs back to 25%.

Outgoing Canadian Prime Minister Justin Trudeau retaliated to Trump’s targeting of Canadian goods last week by announcing increased tariffs on U.S. exports. Mark Carney, who is set to become prime minister in the coming days, said Tuesday that the government’s response will maximize impact on the United States and minimize impact on Canada.

“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade,” Carney said in a statement.

Trump has further stoked tensions with Canada by suggesting it become the 51st U.S. state.

“This would make all Tariffs, and everything else, totally disappear,” Trump said Tuesday on his Truth Social platform. “Canadians’ taxes will be very substantially reduced, they will be more secure, militarily and otherwise, than ever before, there would no longer be a Northern Border problem, and the greatest and most powerful nation in the World will be bigger, better and stronger than ever — And Canada will be a big part of that.”

He suggested that the Canadian national anthem, “O Canada,” could still be sung, “but now representing a GREAT and POWERFUL STATE within the greatest Nation that the World has ever seen!”

Trump’s tariff-trade wars with Canada and Mexico, which he also hit last week with a new 25% levy on exports before likewise delaying it, have sent jitters through Wall Street.

Stock indexes have plunged for days, wiping out vast market gains for wealthy Americans along with much more modest profits for everyday investors.

Some information for this story was provided by The Associated Press, Agence France-Presse and Reuters

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