Trump is back on his tariff game and is not being subtle about it.

The President just imposed a 25% tariff on all steel and aluminum imports coming into the US.

This isn't just aimed at China, either—Canada, Mexico, the EU, Brazil, and South Korea are all caught in the crossfire starting April 2nd.

The America First Play

Trump's whole pitch is that these tariffs will create factory jobs and make America great again.

That’s all well and good, but without steel to get those factories up and running, there’s now a bit of a chicken and an egg problem in the works. 

Markets are also unhappy with the news – the S&P 500 is down 8% this month.

But apparently, Trump has a plan – jacking up prices on essential industrial materials to match tariffs imposed on US goods is more of a long-term play to bring decently paying manufacturing jobs back to the US. 

While it’s not a perfect plan, it’s also not terrible. 

He's basically betting that companies will eat the costs and build factories in the US rather than deal with the tariff pain and start building in the heartland once again. 

Winners and Losers

Let's keep it real about who actually benefits from this move, though – after all, there are always winners in any reshuffle. 

Steel and aluminum producers in the US are popping champagne with an extra $2.3 billion in their pockets.

Meanwhile, companies that actually make things using those materials lost $3.5 billion in production in 2021 alone.

Volvo, Volkswagen, and Honda are looking at their US expansion plans to circumvent the tariffs altogether – 4D chess in the works?

Europe Isn't Having It

The EU just pulled out their own economic sledgehammer in response.

They're targeting $28 billion worth of American goods with their own tariffs rolling out in two phases.

April 1st is just the appetizer – the full menu of pain comes by April 13th.

The timing is brutal, too – right when American companies were hoping for some economic stability.

We're watching a potential global trade war unfold in real time. 

Australia is already calling the tariffs unjustified, though it is not jumping into the tariff pool just yet.

Every major trading partner is now being forced to choose between taking the hit or hitting back.

And historically, trade wars tend to tank markets faster than bad earnings reports.

The End, Or The Beginning?

Ursula von der Leyen is talking about "meaningful dialogue" while simultaneously loading the economic cannon.

Trade Commissioner Šefčovič (that was rough to type on an American keyboard) is on the phone with his American counterparts, trying to defuse this bomb before it fully explodes.

Neither side wants an all-out trade war, but neither wants to look weak by backing down first – and somewhere in the middle, regular consumers and businesses are about to pay higher prices for everything from cars to construction.