President Donald Trump’s increased tariffs on all US steel and aluminum imports took effect on Wednesday, stepping up a campaign to reorder global trade in favor of the US and drawing swift retaliation from Canada and Europe.

Trump’s action to bulk up protections for American steel and aluminum producers restores effective tariffs of 25% on all imports of the metals and extends the duties to hundreds of downstream products, from nuts and bolts to bulldozer blades and soda cans.

Trump’s hyper-focus on tariffs since taking office in January has rattled investor, consumer and business confidence in ways that economists worry could cause a US recession and further lag on the global economy.

The European Commission, the executive arm of the European Union charged with coordinating trade matters, responded swiftly, saying it would impose counter tariffs on up to 26 billion euros ($28 billion) worth of US goods — often with more symbolic than economic impact — from next month.

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Nevertheless, Commission President Ursula von der Leyen told reporters she had tasked Trade Commissioner Maros Sefcovic to resume talks with US officials on the matter.

“We firmly believe that in a world fraught with geoeconomic and political uncertainties, it is not in our common interest to burden our economies with such tariffs,” she said.

Canada, the biggest foreign supplier of steel and aluminum to the United States, will announce C$29.8 billion in retaliatory tariffs on Wednesday, a Canadian official who declined to be named said.

China’s foreign ministry said Beijing would take all necessary measures to safeguard its rights and interests, while Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said the move could have a major impact on US-Japan economic ties.

Close US allies Canada, Britain and Australia criticised the blanket tariffs, with Australian Prime Minister Anthony Albanese saying the move was “against the spirit of our two nations’ enduring friendship”. However, he ruled out tit-for-tat duties, as did Britain.

That incident whip-sawed US financial markets, which were already jittery over Trump’s broad tariff offensive. With Wednesday’s tariff increase well-flagged in advance, Asian and European markets were broadly steady on Wednesday, and US stock index futures rose.

Companies such as Ford, General Motors, Howmet and Honeywell, which use steel and aluminum in their supply chains, were little changed in premarket trading.

Nonetheless, a steep US stocks selloff in March has wiped out all of the gains notched by Wall Street following Trump’s election.

The back-and-forth US tariff plans have left companies unnerved, upending industries from autos to energy.

“Nearly everyone in the economy is struggling to comprehend wild swings in Washington policies, and their implications for everyday decisions,” said Stephen Dover, Franklin Templeton’s chief market strategist.

Luxury carmaker Porsche said it was assessing how to pass the cost of tariffs on to consumers.

US steel producers welcomed Wednesday’s move, noting Trump’s original 2018 tariffs had been weakened by numerous country- and product-specific exclusions.

“By closing loopholes in the tariff that have been exploited for years, President Trump will again supercharge a steel industry that stands ready to rebuild America,” Steel Manufacturers Association President Philip Bell said.

Canadian aluminum supplies

The escalation of the US-Canada trade war occurred as Prime Minister Justin Trudeau prepares to hand over power to his successor, Mark Carney, who won the leadership race of the ruling Liberals last weekend.

Trump repeated on social media that he wanted Canada as “our cherished Fifty First State.”

Canadian Energy Minister Jonathan Wilkinson told Reuters that Canada could impose non-tariff measures such as restricting oil exports to the US or levying export duties on minerals if US tariffs persist.

Canada, with ample hydropower resources that have made primary aluminum production more cost-effective than in the US, has built a commanding position in the US aluminum market, as US smelters, once revived by Trump’s tariff, have been idled.