US imposing steel and aluminium tariffs on Canada

French President Emmanuel Macron right and Organisation for Economic Co-operation and Development Secretary General Angel Gurria arrive at the OECD ministerial council meeting on

President Trump plans to impose steel, aluminum tariffs on the European Union

Some of the United States's closest allies are baffled and frustrated by President Trump's decision to impose steep tariffs on US imports of their steel and aluminum, and officials in the European Union, Canada and Mexico are calibrating how hard to hit back.

"Hopefully they can agree to keep talking about these issues, although that is unlikely", he said, adding that Trump's recent actions proved to USA allies that Washington would not de-escalate the dispute.

The European Union has already notified the World Trade Organization of plans to levy duties on $7.2 billion worth of US exports in response, with the aim of collecting $1.6 billion in tariff revenue. "This is protectionism, pure and simple".

The Trump administration is making good on its threat to slap Canada with hefty steel and aluminum tariffs, setting the stage for a possible trade war and leaving Prime Minister Justin Trudeau in the middle of a very divided group of leaders at next week's G7 summit.

The Mexican government said that the United States action was not justified, and that it would retaliate with its own comparable penalties on U.S. lamps, pork, fruit, cheese and flat steel.

Nafta talks continue, with a deal needed probably within days to have any hope of passing the current USA congress and with Mexican elections one month away.

French President Emmanuel Macron, who unsuccessfully lobbied against both Trump's tariffs and US withdrawal from the Iran nuclear deal during his official state visit to Washington last month, criticized the tariffs in a speech on Wednesday as part of a larger "nationalist retrenchment" reminiscent of Europe in the 1930s.

Finance Minister Bill Morneau said in a statement late Wednesday that Canada has expanded the scope of its country of origin marking regime for steel and aluminum products to better determine where they come from. Both parties had previously said that tariffs would be put on hold as talks continued.

U.S. Commerce Secretary Wilbur Ross said during a call with reporters on Thursday that slow progress on the NAFTA renegotiation is another reason why Canada and Mexico will now be subject to the import tariffs.

European Union countries have given broad support to the Commission's plan to set duties on 2.8 billion euros ($3.4 billion) of US exports, including whiskey and motorbikes, if Washington ends the European Union tariff exemption.

Canada is expected to retaliate.

Such an action could hurt Mexico, Canada, Germany and Japan.

Ross downplayed the threats of retaliation from those countries, but said talks could continue even amid the dispute to try to find a solution.

"There is potential flexibility going forward", Ross said.

"We want to be exempt from these tariffs" which were "not compatible" with World Trade Organization (WTO) rules, Merkel told a press conference with Portuguese premier Antonio Costa in Lisbon.

Stephanie Segal, deputy director of the Simon Chair in political economy at the Center for Strategic and International Studies, said Washington's many about-faces meant consensus in the near-term was an increasingly dim prospect.

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