Donald Trump’s tariffs on steel and aluminum take effect as trade war heats up

The trade war between the US and its trading partners is about to heat up as new tariffs are applied to steel and aluminum.

President Donald Trump is pressing ahead with his plan to impose 'catastrophic' tariffs to the US' trading partners which he signed off on in an executive order within moments of being sworn into office.

The initiative comes as Trump accuses Canada, Mexico and China of failing to stop a 'flow of illicit drugs' bypassing US borders and cited immigration as another justification for the tax sanctions.

Now, new tariffs applied to steel and aluminum have taken effect which is expected to aggravate growing tensions with America's trading partners.

The president has pressed ahead with the plan (Andrew Harnik/Getty Images)

The tax hike raises a flat duty to the metals entering the States to 25 percent, effectively ending all country exemptions to the levies overnight.

Canada is particularly disgruntled by the measures as Trump threatened to double US tariffs to 50 percent on the country's steel and metal imports.

When faced with retaliatory threats of counter-tariffs, the Trump administration backed down.

Premier of Ontario Doug Ford has been leading the charge in the fight back, having threatened to hike electricity prices by 25 percent, adding on an average of $100 per month to 1.5 million Americans' electricity bills, or shut off the power completely to neighboring states Minnesota, New York, and Michigan.

Still, Canada will be among the countries facing the brunt of the US' new 25 percent tariffs on steel and aluminum as well as Mexico and Brazil, the three of which stand as the largest supplies of the metals to the states.

The UK's trade minister, Jonathan Reynolds, said he was disappointed by the move while Australian Prime Minister, Anthony Albanese, said the decision is 'entirely unjustified'.

Doug Ford has threatened to turn the lights out to 1.5 million Americans (Steve Russell/Toronto Star via Getty Images)

"It's against the spirit of our two nations' enduring friendship and fundamentally at odds with the benefits that our economic partnership has delivered over more than 70 years," he added.

The European Union has further said it would impose retaliatory duties on 26 billion euros ($28.3 billion) of US goods in response.

But the POTUS said he hopes the hikes will provide a well-needed boost to steel and aluminum produced on US soil.

The American Iron and Steel Institute (AISI), representing US steelmakers, is celebrating the plan and claims it will create jobs and boost steel manufacturing across the country.

AISI president, Kefvin Dempsey, said: "AISI applauds the president's actions to restore the integrity of the tariffs on steel and implement a robust and reinvigorated program to address unfair trade practices."

However, critics claim the hikes will have a domino-effect on prices for US consumers and could jeopardise economic growth, particularly in industries like aerospace, car manufacturing and construction.