U.S. to slap tariffs on steel, aluminium from European Union on Thursday

Trump Slaps Steel and Aluminum Tariffs on the E.U., Canada, and Mexico

US imposes steel, aluminum tariffs on EU, Canada, Mexico

In a trade war it can be hard to tell friends from enemies.

European key markets also fell, having earlier been on the path to recovery as investors took a more sanguine view of an ongoing political crisis in Italy.

In a series of tweets shared at the time, Trump expanded on his initial plans to implement tariffs after an announcement he made in March.

In response to the announcement, European Commission President Jean-Claude Juncker lamented that today is a bad day for world trade, adding that it is "totally unacceptable that they impose unilateral tariffs on trade - countermeasures will follow".

She says most companies have some breathing room because of hedging contracts that protect them from wild price swings.

The Mexican measures target pork legs, apples, grapes and cheeses as well as steel - products from US heartland states that supported Trump in the 2016 election. Steel is less lop-sided but the US still didn't have the capacity to make all the steel the country needed.

Financial markets dipped amid concerns about the disputes among trading partners, with the Dow Jones industrial average dropped more than 200 points.

Trudeau announced that Canada would be imposing the same tariffs on American products that the USA has imposed against Canadian imports.

In Canada, Prime Minister Justin Trudeau called the USA tariffs "totally unacceptable".

"We are alienating all of our friends and partners at a time when we could really use their support", said Wendy Cutler, a former USA trade negotiator who is now vice-president at the Asia Society Policy Institute.

"When you look at G7 nations, European allies, Canada, Mexico, it shows that we need to have an opportunity to come together to discuss this directly and firmly and look for opportunities to benefit our citizens, not to harm them", he continued.

"The effects of retaliatory measures will similarly ripple across our economy, stunting growth and job creation while threatening to fracture our alliances with our strongest global partners".

In terms of the NAFTA talks, the tariffs could hinder the negotiations among the North American neighbours.

On Wednesday, the Trudeau government said it would take additional steps to prevent foreign steel and aluminum from being dumped into the North American market - news that appeared created to try to head off the tariff decision. Tariffs will remain on imports from Japan. The probe was seen as an attempt to pressure Mexico and Canada over a NAFTA deal, considering they are the two-biggest suppliers of foreign vehicles to the U.S.

Worries about a United States trade war with the European Union weighed on Wall Street stocks at the open, but shares of USA steel and aluminum makers were up strongly. "For every one job in the US steel industry that could be protected by this tariff, there are about 80 jobs in manufacturing industries that use steel".

The EU trade commissioner, Cecilia Malmstrom, said Thursday the EU "did everything to avoid this outcome", as the bloc announced it would bring the case to the World Trade Organization (WTO) on Friday. For Tata Steel Europe, the US accounts for 10% of its sales.

"Obviously, we still hope the United States will think again about this".

"Mexico deeply deplores and condemns the decision by the United States to impose these tariffs", it said in a statement.

"By targeting those who are not responsible for overcapacities, the U.S.is playing into the hands of those who are responsible for the problem", he said. "I have argued for the European Union and the USA to engage in a positive trans-Atlantic trade agenda, and for the European Union to be fully, permanently and unconditionally exempted from these tariffs".

The Trump administration has given permanent metals tariff exemptions to several countries including Australia, Argentina and South Korea, but in each case set import quotas.

As previously threatened, steel imported from Canada, Mexico and the European Union will be subject to a 25 percent tariff.

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