Canada and the European Union quickly unveiled retaliatory levies against the U.S. on Wednesday, hours after President Donald Trump’s sweeping tariffs on imported steel and aluminum imports took effect, triggering more tremors through financial markets and fueling fears of inflation and recession.
Mexican President Claudia Sheinbaum said Wednesday her government will wait for a possible resolution in coming weeks before deciding on retaliation.
Trump‘s global tariffs of 25% on all imports of the metals also extend the duties to hundreds of products made from the metals. Trump defended the tariffs in remarks late Tuesday and hinted at the possibility of higher levies in the future.
The action comes amid broad economic upheaval: The National Oceanic and Atmospheric Administration revealed it is laying off 1,029 workers as part of the Trump administration’s mass layoffs across federal departments. Federal agencies face a deadline Thursday to submit plans for large-scale layoffs as part of the administration’s effort to shrink the federal government.
U.S. stocks were mostly higher in afternoon trading Wednesday but have fallen sharply in recent days amid constant news of tariffs and job cuts. J.P. Morgan’s chief economist said Wednesday that there is a 40% chance of a U.S. recession in 2025.
The U.S. will respond to Europe’s levies with additional tariffs on imports from the European Union, Trump said Wednesday.
“Of course I will respond,” Trump told reporters after the EU announced new tariffs on $28 billion of U.S. industrial and farm products. The tariffs counter Trump’s 25% tariffs on all aluminum and steel imports.
“The European Union treats us very badly, and they have for years,” Trump said as he met in the Oval Office with Ireland Prime Minister Micheal Martin, whose country is part of the EU. Trump accused Ireland and other European nations of taking advantage of the U.S., and he accused Ireland of drawing pharmaceutical companies away from the United States.
“Look, the Irish are smart,” Trump said to Martin. “You have smart people. And you took our pharmaceutical companies, and other companies, through taxation. They made it very good for companies to move over there.”
Trump also reiterated the EU, like all nations, will be subject to his new reciprocal tariffs, set to go in effect April 2, whereby the U.S. will respond to any country’s tariffs applied to U.S. exports by matching with identical levies of the same rates.
“It doesn’t even matter what it is,” Trump said. “If they charge us 25% or 20% to 10% or 2% or 200%, then that’s what we’re charging them.”
Canadian authorities announced tariffs on more than $20 billion worth of American goods in retaliation for the tariffs on Canadian steel and aluminum. Earlier, Ontario Premier Doug Ford said he would fly to Washington on Thursday for talks with U.S. Commerce Secretary Howard Lutnick and other Trump administration officials to discuss revising the U.S.-Mexico-Canada Agreement on trade.
That came after a flurry of activity Tuesday, when Trump threatened Canada with doubling the duty to 50% on its steel and aluminum exports.
Trump reversed course after Ford, essentially the governor of the Ontario province, said he would suspend a proposed 25% electricity surcharge on about 1.5 million U.S. energy users in New York, Michigan and Minnesota. Ford made his decision after a phone call with Lutnick: “We have both agreed, let cooler heads prevail,” Ford said.
“We will wait until April 2 and from then we will see whether our definition of reciprocal tariffs will be applied too,” he said.
Tariffs can apply to exports but are are primarily levied on imports, typically to protect industries in the country levying them. Tariffs make imports more expensive, thus making local goods cheaper by comparison. Tariffs also can provide income that can be used to support local industries, fund public programs or cover government expenditures.
And they can serve as bargaining tools to win concessions from trading partners.
“While tariffs may seem to penalize foreign producers by making their goods or services less competitive, the reality is that U.S. consumers and businesses ultimately bear the cost,” the Wilson Center scholars Diego Marroquín Bitar and Valeria Moy write in a “Tariffs 101” analysis.
Trump on Wednesday defended his administration’s decision to lay off about half of the Education Department’s staff, citing concerns that students in China, Norway, Denmark and Sweden are performing better than those who go to schools in the U.S.
Trump told reporters at the White House he supports Education Secretary Linda McMahon and the workforce reduction at the department. He said it’s a move toward the administration’s goal to move education oversight from federal to state leaders.
“We have a dream. And you know what the dream is? We’re going to move the Department of Education,” Trump said. “We’re going to move education into the states, so that the states − instead of bureaucrats working in Washington − can run education.”
− Kayla Jimenez
Inflation eased more than expected in February, but the reprieve will likely be short-lived, economists say, and the barrage of import tariffs is likely to propel prices higher. Used car prices rose in February while gasoline costs fell. Grocery prices were flat after a flurry of increases and rent hikes slowed to a new three-year low.
Some economists say the president’s import fees, especially on Chinese shipments, may already be reigniting inflation for products such as household furnishings, apparel and electronics.
In February, consumer prices climbed 2.8% from a year earlier, down from a 3% rise the previous month, according to the Labor Department’s consumer price index, a measure of average changes in goods and services costs. That breaks a string of four straight increases in the annual price measure but still leaves it well above the September low of 2.4% and the Federal Reserve’s 2% goal. Read more here.
− Paul Davidson
The National Oceanic and Atmospheric Administration is laying off 1,029 workers as part of the Trump administration mass layoffs across federal departments, according to a NOAA email obtained by USA TODAY. The agency, which includes the National Weather Service, forecasts weather, monitors oceanic and atmospheric conditions and conducts deep-sea exploration, among other responsibilities. NOAA has a workforce of about 12,000 worldwide but already cut more than 880 employees two weeks ago.
“It does not include reductions in NWS forecast operations and maintenance support at this time,” the email sent to NOAA staff reads. “However, the final determination will be made by the Department of Commerce.”
The terminations come after more than 880 recently hired or promoted probationary workers were terminated last month. However, the latest email to employees notes that “a few probationary employees in NOAA… have received rescission letters reversing their terminations.” The email said it was determined those layoffs “were made in error.”
Federal departments across the government are finalizing “Reduction in Force” plans in their agencies ahead of a Thursday deadline set by the Trump administration.
− Joey Garrison
NOAA has sweeping responsibilities for safeguarding American lives and protecting property through monitoring and forecasting the nation’s most violent storms, daily weather and long-term climate. NOAA’s cuts at the National Weather Service, which it oversees, could have direct impacts on weather forecasts we rely on. Every time you check your phone for the latest weather forecast, you put your trust in data from the National Weather Service.
Information from the weather service “underpins the forecasts within weather apps, news reports, hurricane path models and extreme weather alerts,” the National Resources Defense Council said in a recent report.
There is about a 40% chance of a U.S. recession this year and a risk of lasting damage to the country’s standing as an investment destination if the administration undermines trust in U.S. governance, according to J.P. Morgan’s chief economist.
“Where we stand now is with a heightened concern about the U.S. economy,” Bruce Kasman, the U.S. investment bank’s chief global economist, told reporters in Singapore on Wednesday.
Economists at Goldman Sachs and Morgan Stanley last week downgraded their U.S. GDP growth forecasts and now see growth at 1.7% and 1.5% this year, respectively.
Just a month after Trump‘s administration fired over 100,000 early-tenure government employees, his administration is planning a larger slashing of workforce across the country. The job cuts come as economists are increasingly worried about the risk of a recession because of Trump’s trade war with Canada and Mexico, which has battered stock prices.
On Tuesday, a Trump administration official told USA TODAY the Department of Education will be laying off one-half of its staff. Department employees were ordered not to come into the office on Wednesday.
The next big deadline is Thursday, when agencies need to submit plans for large-scale layoffs. Agencies may notify employees any day that their jobs are expiring within 30 or 60 days.
− Erin Mansfield
Wisconsin Gov. Tony Evers, a Democrat, was frank the day after the Trump administration announced roughly half of the Department of Education’s workforce would be terminated.
“I know Wisconsin kids and our schools – getting rid of the U.S. Department of Education and making devastating cuts to public education would be a catastrophe, as simple as that,” he said in a press call.
Evers is a former teacher, principal and superintendent. He joined fellow Democratic governors and former educators Matt Meyer of Delaware and Tim Walz of Minnesota on a call to condemn the recent layoffs.
Walz also took aim at recently installed Secretary of Education Linda McMahon, who defended the cuts and said the administration “kept all of the right people and the good people.”
“Saying she fired half the people but only the bad ones,” Walz said the next morning. “She missed one. She missed one for sure, and that’s herself.”
− Savannah Kuchar
U.S. consumers could see higher prices on a wide range of products, from fertilizers to printed books and sugar. Those planning vacations could feel the effects, too. Trump’s latest tariffs are likely to have some impact on travelers, though it won’t be as immediate or noticeable as the rise in prices in other areas.
According to Steven A. Carvell, a professor of finance at the S.C. Johnson College of Business at Cornell University, business travel will likely take the biggest hit first. He added that large trade shows like the annual Consumer Electronics Show (CES) in Las Vegas could be affected if businesses decide to prioritize exhibiting in other countries.
“There will be less cross-border travel and less demand for hotel room nights because of that,” Carvell told USA TODAY. “Group travel will be down because of that, meetings maybe.”
Trump defended his aggressive use of tariffs in remarks Tuesday to business leaders in Washington – and suggested higher tariffs could be on the way. Speaking before The Business Roundtable, Trump touted a “renewed spirit” in the U.S. manufacturing sector because of his tariffs on imports, even as the new duties have caused the stock market to plunge.
“They don’t want to pay 25% or whatever it may be,” Trump said of companies, referring to the tariff rate he’s set on imports from Canada and Mexico as well as all steel and aluminum imports. “It may go up higher. Look, the higher it goes, the more likely it is they’re going to build (in the United States).”
Trump’s remarks came shortly after his administration abruptly reversed doubling steel and aluminum imports from Canada to 50% after Ontario’s premier, Doug Ford, agreed to suspend a 25% electricity surcharge on U.S. energy users.
Some companies have said they are looking at expanding their presence or setting up shop in the United States as they prepare for Trump‘s tariffs. The Italian spirits group Campari is assessing the opportunities to expand its production in the U.S. without losing the essence of its brand portfolio, its new CEO Simon Hunt said on March 5.
The Taiwanese contract laptop maker Compal Electronics may expand into the U.S. and has spoken to several southern states about a possible investment, CEO Anthony Peter Bonadero said in January, adding that Texas was a leading candidate, but no decisions had been made yet. Read more here.
Contributing: Reuters
