Steel manufacturers across the world have spent the past few years perturbed by the overcapacity of Chinese steel that has burdened them deeply. Supported by government subsidies, manufacturers in China resorted to massive global dumping of steel, consequently driving steel prices down. This meant a host of anti-dumping duties levied on Chinese steel across the world. But with President Trump’s latest tariffs on steel imports for US, global steel players now have a bigger fish to fry.

For one thing, steel exporters to the US are worried about their business. Their steel will become less competitive in the US market which is one of the biggest consumers of steel. Meanwhile, steel makers in other countries producing steel for domestic consumption are worried US tariffs will lead to trade diversion.

Countries exporting steel to the US have to find market somewhere. They could divert export streams to other countries that do not have tariff protections in place pushing local players to compete with the imported variety. Of these, the European Union bloc seems the most worried.

The bloc has been temporarily exempted from Trump’s tariffs; along with Mexico, Canada, Argentina, Australia, Brazil and South Korea. But this isn’t enough. The EU announced that it would be launching a safeguard probe into whether these tariffs could lead steel manufacturers to flood the EU with the commodity in order to fill the vacuum that the US market is likely to create post-tariffs.

Clearly, the turbulence that Trump brought with him since he got elected into office is not limited to tensions between Republicans and Democrats on domestic issues. On Trump’s agenda to ‘make America great again’ is to follow up on his protectionist promises starting with steel and aluminum tariffs. It is clear that the President’s real target has been China—given these tariffs were followed up by $50 billion worth of levies against Chinese imports—but it is US allies that will face the heat. (Read: “US vs. China: Clash of the Titans”, March 19, 2018).

The EU’s probe that will cover 40 percent of the bloc’s steel imports will last nine months and could potentially result in the bloc imposing its own set of tariffs and duties to protect domestic interests. Moreover, if the exemption to the EU is not permanent, the EU is prepared to go all the way to the World Trade Organization and file a dispute against Trump’s tariffs. Like China, the EU has also vowed to hit back on US exports that find market access into the EU.

The question is, can the US make decisions that have global consequences without having it all backfire? It seems highly improbable. Perhaps that’s a gamble the Trump administration is willing to take.