President Donald Trump’s 25% tariffs on steel and aluminum imports into the U.S. officially took effect on Wednesday, marking a significant escalation in global trade tensions. The European Union wasted no time in responding, announcing counter-tariffs on €26 billion (£21.92 billion) worth of U.S. goods.
The tariff implementation follows Trump’s mid-February announcement of broad levies on Mexico, Canada, and China, heightening fears of an all-out trade war. However, in a surprising turn, the president rolled back plans for a steeper 50% tariff on steel and aluminum imports just hours after threatening to impose them.
Market Reaction: United States Steel Surges
Investors reacted swiftly to the tariff news, with shares of United States Steel Corporation (NYSE: X) jumping 5.5% on Tuesday. Despite this surge, pre-market trading on Wednesday saw the stock stabilizing, hovering just above the flatline.
Concerns continue to mount over the impact of tariffs on inflation and economic growth, with fears that protectionist measures could further slow the economy. Some analysts warn that heightened trade tensions could contribute to market instability, with traders closely watching further developments.
Richard Hunter, head of markets at Interactive Investor, highlighted the uncertainty in the market, stating:
“Trade policy continues to top the list of investor concerns. Markets dislike uncertainty, and with fluctuating messages coming from the White House, it’s currently impossible to predict the immediate future.”
Hunter also noted that the ongoing tariff situation will likely maintain market volatility until a clearer economic picture emerges.
Super Micro Computer (SMCI) Soars Amid AI Rebound
While steel stocks captured attention, AI-driven stocks also staged a strong comeback, with Super Micro Computer (NASDAQ: SMCI) leading the charge in the S&P 500 on Tuesday. The server maker’s shares rebounded following Monday’s sell-off, fueled by renewed investor confidence in AI-related equities.
Super Micro’s rise coincided with a bullish rating from Rosenblatt Securities analyst Kevin Cassidy, who reinitiated coverage of the stock with a “buy” recommendation. The company had also recently reassured investors by meeting a Nasdaq deadline to submit delayed regulatory filings, avoiding a potential delisting.
According to investment platforms Robinhood (NASDAQ: HOOD) and AJ Bell (LON: AJB), Super Micro was one of the most popular stocks among UK investors last month.
Oil and Gold Prices React to Trade War Fears
Broader market movements reflected rising economic anxieties, with both oil and gold prices climbing amid escalating trade war concerns. Safe-haven assets such as gold typically gain traction during periods of heightened uncertainty, while oil markets remain sensitive to potential disruptions caused by geopolitical tensions.
What’s Next?
With tariffs now in full effect and global trade tensions at a boiling point, market participants will be closely monitoring further policy shifts from Washington and responses from international trade partners. The question remains: How will escalating tariffs shape the future of global markets?
