Allies retaliate with countermeasures as US hits Canada, Mexico and EU with tariffs

WASHINGTON – The United States and its traditional allies are on the brink of a full-scale trade war after European and Canadian leaders reacted swiftly and angrily to Donald Trump’s decision to impose tariffs on steel and aluminium producers.

US commerce secretary Wilbur Ross, who is in Paris, said a 25% tax on steel and 10% tax on aluminium from the EU, Mexico and Canada will start from midnight on Thursday.

“We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved,” he said.

The move immediately triggered vows of retaliation from Mexico, Canada and the EU, which called the tariffs “protectionism, pure and simple”.

EU trade commissioner Cecilia Malmstrom said it was a “bad day for world trade”, while European Commission president Jean-Claude Juncker said the move was “totally unacceptable”.

The EU has “no choice” but to bring a case before the World Trade Organization and impose duties on US imports, he added.

Europe, along with Canada and Mexico, had been granted a temporary reprieve from the tariffs after they were unveiled by Donald Trump two months ago.

The U.K. said it was “deeply disappointed” by the US decision, which followed weeks of negotiations.

The tariffs will hit products such as plated steel, slabs, coil, rolls of aluminium, and tubes, raw materials which are used extensively across US manufacturing, construction, and the oil industry.

Canadian Prime Minister Justin Trudeau said the tariffs were an “affront” to the longstanding relationship between Canada and the U.S., especially to the “thousands of Canadian soldiers who fought and died alongside their American comrades-in-arms” in Afghanistan.

He said Canada plans to levy tariffs on American products worth about $13bn starting 1 July. It is also planning a challenge at the World Trade Organization.

He said: “We have to believe that at some point common sense will prevail but we see no sign of that in this [US] action today.”

Canada said it would put 25% tariffs on certain types of American steel, as well as a 10% tax on other items, including yoghurt, whiskey and roasted coffee.

Mexico’s Economy Ministry said it is planning new duties for steel, pork legs and shoulders, apples, grapes, blueberries and cheese.

German Chancellor Angela Merkel said the EU response will be “intelligent, decisive and joint”, adding that the tariffs are incompatible with WTO rules.

France’s President Emmanuel Macron spoke forcefully against the tariffs, calling them “illegal” and a “mistake”.

He said he will speak with Donald Trump on Thursday evening, warning that the move could close the door on other talks.

Europe had previously outlined a list of items, including US bourbon, cranberries and jeans, as targets for retaliation.

Fears of a global trade war are already weighing on investor confidence and could hinder the global economic upturn. European officials argue that tit-for-tat tariffs will hurt growth on both sides of the Atlantic.

Brazil, Argentina and Australia have agreed to limit steel shipments to the U.S. in exchange for being spared the tariffs, the US Department of Commerce said. Tariffs will remain on imports from Japan.