U.S. metals tariff hike backfires, sparks condemnation and countermeasures

The latest U.S. tariff hikes on steel and aluminum imports, from 25 percent to 50 percent, have drawn a backlash from U.S. industries and triggered countermeasures from major trading partners.

Citing experts, ABC News reported that the higher levies could drive up costs for cars, appliances and other consumer goods.

"Twenty-five percent tariffs were already high," Kyle Handley, a professor of economics at the University of California, San Diego, told ABC News. "Fifty percent is incredibly high."

Steel is the top material by weight in a car, accounting for about 60 percent of its weight, according to the American Iron and Steel Institute.

William Hauk, a professor of economics at the University of South Carolina who studies international trade, told ABC News that the new tariff level could raise the price of a car by $2,000 to $4,000.

Major home appliances – such as refrigerators, dishwashers and washing machines – rely in part on steel, making them vulnerable to potential price increases, Handley said.

"All those things will be even more expensive to produce if the steel and aluminum inputs are more costly, which they absolutely will be," Handley said.

While those U.S. businesses will suffer from the tariff hikes, major U.S. trading partners said the U.S. metal tariffs "unfair" and called for countermeasures.

Mexican President Claudia Sheinbaum on Wednesday described the latest U.S. tariff hikes on steel and aluminum imports as "unfair," "unsustainable," and lacking any "legal basis."

At her daily morning press conference, Sheinbaum said the measure, which applies to all countries except the UK, is unfair to Mexico because "Mexico imports more steel and aluminum than it exports."

In addition, Mexico and the United States are partners to a free trade agreement, so from the Mexican government's perspective, the tariff "has no legal basis."

Sheinbaum also said the tariff will prove unsustainable "because just as there are many auto parts that cross from one side of the border to the other, the same occurs with steel."

The Mexican president said she would meet with industry leaders during the day to present strategies, and her economy secretary, Marcelo Ebrard, was preparing negotiations with U.S. authorities this week in anticipation of an agreement.

With no agreement, her administration will announce what measures it will take next week, said Sheinbaum, adding it is not about "an eye for an eye," but about supporting the industry and the jobs it creates, which are "very important."

On the same day, Canada's largest private sector union, Unifor, urged the federal government to act without delay to counter the escalating steel and aluminum tariffs initiated by the United States.

"These tariffs are killing investment in our steel, aluminum, and auto sectors, and we are already seeing the consequences in lost jobs and economic instability," said Unifor National President Lana Payne. "We need immediate and forceful action to defend good jobs and safeguard our national economic security."

European Commissioner for Trade and Economic Security Maros Sefcovic warned on Wednesday that the U.S. decision to raise tariffs on steel and aluminum "clearly doesn't help the ongoing negotiations" and risks undermining recent progress.

Sefcovic added that the EU stands ready to defend its interests and will do its utmost to rebalance trade should negotiations collapse.

(With input from agencies)