Prime Minister Justin Trudeau and Global Affairs minister Chrystia Freeland responded with another $16.6 billion worth of tariffs against U.S. imports. </s> WASHINGTON/PARIS (Reuters) - Canada and Mexico retaliated against the United State’s decision on Thursday to impose tariffs on steel and aluminium imports and the European Union had its own reprisals ready to go, reigniting investor fears of a global trade war.

The tariffs, announced by U.S. Commerce Secretary Wilbur Ross in a telephone briefing on Thursday, ended months of uncertainty about potential exemptions and suggested a hardening of the Trump administration’s approach to trade negotiations.

The measures, touted by President Donald Trump in March, drew condemnation from Republican lawmakers and the country’s main business lobbying group and sent a chill through financial markets.

The Dow Jones Industrial Average .DJI lost 1 percent and the S&P 500 .SPX shed around 0.66 percent. Shares of industrial heavyweights Boeing (BA.N) fell 1.7 percent and Caterpillar (CAT.N) 2.2 percent.

A 25 percent tariff on steel imports and 10 percent tariff on aluminium imports will be imposed on the EU, Canada and Mexico from midnight (0400 GMT on Friday), Ross told reporters.

“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.

Canada and Mexico, embroiled in talks with the United States to modernize the North American Free Trade Agreement (NAFTA), responded swiftly.

Canada, the largest supplier of steel to the United States, will impose tariffs covering C$16.6 billion ($12.8 billion) on imports from the United States, including whiskey, orange juice, steel, aluminium and other products, Canadian Foreign Minister Chrystia Freeland said.

“The American administration has made a decision today that we deplore, and obviously is going to lead to retaliatory measures, as it must,” Prime Minister Justin Trudeau said at a news conference with Freeland.

Mexico announced what it described as “equivalent” measures on a wide range of U.S. farm and industrial products.

The measures, which target pork legs, apples, grapes and cheese as well as steel and other products, will be in place until the U.S. government eliminates its tariffs, Mexico’s Economy Ministry said.

The S&P 500’s packaged foods and meats industry sub-index .SPLRCFOOD fell 2 percent, with shares of meat producer Tyson Foods Inc (TSN.N) falling 4 percent, Campbell Soup Co (CPB.N) 2.5 percent and spice maker McCormick & Co Inc (MKC.N) 3 percent.

The Mexican peso MXN= dropped about 1 percent and the Canadian dollar CAD= shed about 0.6 percent. At its low, the peso was at its weakest against the dollar in nearly 15 months.

The EU threatened tariffs on Harley Davidson motorcycles and bourbon, measures aimed at the political bases of U.S. Republican legislators. Shares of Harley-Davidson Inc (HOG.N) fell 2.17 percent and Brown-Forman Corp (BFb.N), maker of Early Times and other bourbon brands, lost 2.1 percent. EU members have given broad support to a European Commission plan to set duties on 2.8 billion euros ($3.4 billion) of U.S. exports if Washington ends tariff exemptions. EU exports potentially subject to U.S. duties are worth 6.4 billion euros ($7.5 billion).

“It’s entirely up to U.S authorities whether they want to enter into a trade conflict with their biggest partner, Europe,” France’s Finance Minister Bruno Le Maire said after meeting with Ross on Thursday.

U.S. Chamber of Commerce President Tom Donohue warned in a letter seen by Reuters to the body’s board that current trade policies could threaten “economic progress” and cause the loss of more than 2 million jobs, mostly in states that voted for Trump and Republican candidates.

The tariffs are part of Trump’s effort to protect U.S. industry and workers from what he described as unfair international competition, a key theme of his “America First” agenda.

Temporary exemptions were granted to a number of nations and permanent ones to several countries including Australia, Argentina and South Korea. U.S. trading partners had demanded that the exemptions be extended or made permanent.

The tariffs are aimed at allowing the U.S. steel and aluminium industries to increase their capacity utilization rates above 80 percent for the first time in years.

Shares of U.S. Steel Corp (X.N) rose 1.7 percent, but AK Steel (AKS.N) fell 1.3 percent and Steel Dynamics Inc (STLD.O) shed 0.9 percent. Shares of Century Aluminum Co (CENX.O) jumped 3.3 percent but Alcoa Corp (AA.N) shed 0.9 percent.

The U.S. administration also launched a national security investigation last week into car and truck imports, using the same 1962 law it has applied to curb incoming steel and aluminium.

“The Trump administration seems to regard overt threats, including tariffs and repudiation of previous agreements, as a key element for gaining leverage in trade negotiations,” said Eswar Prasad, a former head of the International Monetary Fund’s China division and now a professor at Cornell University.

Prasad warned that the United States was doing so at the cost of alienating key allies and undercutting broad international pressure on China to change its trade and economic practices.

Ross himself heads to Beijing on Friday where he will attempt to get firm deals to export more U.S. goods in a bid to cut America’s $375 billion trade deficit with China.

The Trump administration has demanded that Beijing make concessions and threatened to punish it for allegedly stealing U.S. technology by imposing tariffs on $50 billion of imports from China.

While China is seen at more risk from a trade war as its exports are larger than its imports from the U.S., the operations of American companies in China make substantial sales there, which could be hit by any turn in sentiment. ($1 = 0.8575 euros) </s> Prime Minister Justin Trudeau says he will work with Canadian companies hit by punishing U.S. tariffs

Prime Minister Justin Trudeau says he will work with Canadian steel and aluminium companies hit by punishing U.S. tariffs to make sure jobs and workers north of the border are protected.

In a CBC radio interview in Halifax this morning, Trudeau said he had spoken with steel and aluminum producers and assured them ”that Canadian workers and communities continue to do OK despite these unnecessary and punitive actions from the United States.”

Trudeau didn’t specify what that might mean in the wake of U.S. measures aimed at Canada, Mexico and the European Union that slap import duties of 25 per cent on steel and 10 per cent on aluminum.

Asked about how the measures affect relations with the United States and President Donald Trump, Trudeau said it marked “a bit of a turning point, but we’ve always known that this administration is unpredictable.”

Canada has responded by imposing dollar-for-dollar tariff “countermeasures” on up to $16.6 billion worth of U.S. imports.

They come as the two countries, along with Mexico, are trying to hammer out a renegotiated North American Free Trade Agreement and after Trump sent a warning to Trudeau late Thursday that the days of the U.S. being taken advantage of in trade deals “are over.”

Trudeau was in Halifax to speak to the annual conference of the Federation of Canadian Municipalities.

Related: Canada responds to U.S. steel, aluminum tariffs with ‘countermeasures’ of its own

Related: U.S. to slap steel and aluminium tariffs on Canada, Mexico

Like us on Facebook and follow us on Twitter. </s> Prime Minister Justin Trudeau says his government will work to protect Canadian steel and aluminum workers as the tariff tiff between Canada and the U.S. ramps up.

Trudeau says he's already reached out to Canadian steel and aluminum producers to talk about upcoming short-term challenges after the U.S. moved to impose 25 per cent tariffs on some foreign steel and 10 per cent on aluminum, citing national security reasons.

"I've assured them that we're going to be working with them to make sure that Canadian jobs are protected and that Canadian workers and communities continue to do OK despite these unnecessary and punitive actions from the United States," Trudeau told CBC Radio's Information Morning host Portia Clark during a stop in Halifax.

"This is obviously a ridiculous situation that the U.S. has tied national security concerns to trade of metals from Canada.

He didn't detail what measures his government is considering to help the industry.

In retaliation to the United States' tariff announcement, Canada has threatened to impose tariffs of up to $16.6 billion on some steel and aluminum products and other goods from the U.S. — including gherkins and condiments — beginning July 1.

President Donald Trump took to Twitter on Friday to rail against Canada for what he sees as a mistreatment of U.S. farmers.

Canadian officials "must open their markets and take down their trade barriers," he said.

Trudeau said Thursdays tariff announcement marks "a bit of a turning point, but we've always known that this administration is unpredictable."

"In the coming weeks we're actually going to see hardship happening on both sides, well, particularly on the American side of the border," said Trudeau, who was in Halifax to speak to the annual conference of the Federation of Canadian Municipalities. </s> The Trudeau government has retaliated against a 25% U.S. tariff imposed this morning on Canadian steel and aluminum by levying similar tariffs on U.S. steel and aluminum coming into this country. The counter-measures go into effect on July 1st and will stay in place until the U.S. drops its tariffs, according to Foreign Affairs minister Chrystia Freeland. </s> U.S. President Donald Trump suddenly seems to be a big fan of dropping all “tariffs, barriers and subsidies” with at least one trading partner, mere hours after he tweeted “tariffs are the greatest.”

On Tuesday night, Trump issued a tweet proposing that both the U.S. and the European Union drop all three as European Commission President Jean-Claude Juncker prepares to visit Washington for trade talks on Wednesday.

“That would finally be called free market and fair trade!” Trump tweeted.

“Hope they do it, we are ready — but they won’t!”

READ MORE: Trump tweets ‘Tariffs are the greatest!’ as $12B in emergency aid announced for U.S. farmers

The tweet came on the same day that Trump issued this one, amid news that his administration was starting a $12 billion plan to help U.S. farmers amid trade disputes.

Trump’s trade wars have seen the U.S. hit Canada, the European Union and Mexico with tariffs on aluminum and steel — a move that has seen the Great White North fire back with retaliatory tariffs on $16.6-billion of U.S. steel, aluminium and consumer products.

The U.S. has also imposed tariffs on $34 billion in Chinese products and threatened tariffs on $500 billion more in goods. China, meanwhile, retaliated with duties on pork and soybeans.

EU officials have managed expectations about the progress that Juncker is likely to make with Trump.

— With files from The Associated Press </s> LA MALBAIE, Quebec >> Solidifying his solo status on the world stage, President Donald Trump is lashing out at longtime allies over their critiques of his trade policies and plans an early exit from the annual Group of Seven meeting of industrialized nations.

Trump will descend Friday on the annual gathering, held this year at a Quebec resort, but will leave Saturday morning before the event is over, heading out to Singapore for his highly anticipated summit with North Korean leader Kim Jong Un. The White House announced his travel plans after French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau signaled they will use the event to take a stance against new U.S. tariffs on steel and aluminum imports.

“Looking forward to straightening out unfair Trade Deals with the G-7 countries,” Trump tweeted early Friday. “If it doesn’t happen, we come out even better.”

Trump also singled out tariffs on U.S. dairy products in yet another scathing tweet directed at Canada just before the summit begins.

At a joint press conference on Thursday, Macron stressed: “A trade war doesn’t spare anyone. It will start first of all to hurt U.S. workers.” Trudeau said: “We are going to defend our industries and our workers.”

Trudeau, for his part, said Trump’s action would hurt American workers as well as Canadians.

“If I can get the president to actually realize that what he’s doing is counterproductive for his own goals as well, perhaps we can move forward in a smarter way,” Trudeau said.

As tempers frayed, Trump had a ready retort, via tweet: “Please tell Prime Minister Trudeau and President Macron that they are charging the U.S. massive tariffs and create non-monetary barriers. The EU trade surplus with the U.S. is $151 Billion, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow.”

Later Thursday, Trump tweeted: “Prime Minister Trudeau is being so indignant, bringing up the relationship that the U.S. and Canada had over the many years and all sorts of other things...but he doesn’t bring up the fact that they charge us up to 300% on dairy — hurting our Farmers, killing our Agriculture!”

A few hours later, he added, “Take down your tariffs & barriers or we will more than match you!”

With a cool reception all but assured, Trump has complained to aides about even having to attend the meeting, especially since his summit with Kim is just days away. Late Thursday, the White House announced that Trump would be leaving the G-7 late Saturday morning to head to Singapore ahead of his summit with Kim, though the G-7 meeting was scheduled to last until later that day.

Trump will skip out on G-7 meetings about climate change, clean energy and ocean protection.

This marks Trump’s second summit of the G-7, an informal gathering that meets every year under a rotating chairmanship. The member countries are Canada, France, Italy, Japan, Germany, the United States and Britain. The European Union also attends. Trump is set to hold a series of group and one-on-one meetings, including with Trudeau and Macron.

Under Trump, the United States has abandoned its traditional role in the G-7. His predecessors pressed for freer global trade and championed a trading system that required countries to follow World Trade Organization rules. Trump’s policies have been more protectionist and confrontational, driven by a perception that the U.S. has been the victim of poorly conceived trade deals.

Relations have hit such a low that a key question now is whether the seven countries can agree on a joint statement of priorities at the conclusion of the meeting. A gathering of G-7 finance ministers days earlier concluded last week with a message of “concern and disappointment” for Trump from the other six countries. France’s finance minister described the group as “far more a G-6 plus one than a G-7.”

Macron made clear Thursday that the other six countries wouldn’t hesitate to go it alone. On Twitter, he said: “The American President may not mind being isolated, but neither do we mind signing a 6 country agreement if need be.”

Trump’s top economic adviser, Larry Kudlow, was vague Wednesday on the outcome of the summit, saying: “For these kind of decisions, let them meet first. Let them meet; let them discuss. And then we’ll see what happens.”

Tension has been building over a year of policymaking that has distanced the U.S. from traditional allies, including by Trump’s decisions to withdraw the U.S. from the Paris climate accord and the Iran nuclear agreement. The new tariffs— 25 percent on imported steel, 10 percent on aluminum from Canada, Mexico and the European Union — threaten to drive up prices for American consumers and companies and heighten uncertainty for businesses and investors around the globe.

Canada and other U.S. allies are retaliating with tariffs on U.S. exports. Canada is waiting until the end of the month to apply them with the hope the Trump administration will reconsider.

Meanwhile, talks to renegotiate the North American Free Trade Agreement that eliminated most tariffs and duties between the U.S., Canada and Mexico appear to have ground to a halt. Trump injected further uncertainty recently when he floated the idea of replacing NAFTA with two separate trade deals, one with each country.

Critics argue that the growing U.S. isolation is risky at a time when Trump is making diplomatic overtures with North Korea and in the Middle East and could use the support of allies.

Sebastian Mallaby, a senior fellow with the Council on Foreign Relations, described the relationships between the U.S. and the rest of the G-7 as at a “new level of crisis,” saying that it was not just about trade but “a general U.S. attitude toward the system.”

Despite the conflict, Mallaby predicted that the countries would still seek to work with the U.S., calling it “the indispensable country.”

Likewise, Macron described the moment as a period of “great challenges,” but also defended his efforts to befriend the American president, saying the U.S. is a historical ally and “we need them.” </s> "The idea that the Canadian steel that's in military, military vehicles in the United States, the Canadian aluminum that makes your, your fighter jets is somehow now a threat?" he continued in the interview, which took place in Trudeau's office in Parliament in the Canadian capital of Ottawa. "The idea that we are somehow a national security threat to the United States is quite frankly insulting and unacceptable."

After the U.S. announced tariffs on Thursday, Canada responded with retaliatory tariffs, taking "the strongest trade action Canada has taken in the post-war era," according to Canadian Foreign Affairs Minister Chrystia Freeland, while Trudeau said "we have to believe that at some point their common sense will prevail. But we see no sign of that in this action today by the U.S. administration."

In the interview with NBC News, Trudeau pushed back against Trump's characterization that the U.S. is plagued by unfair trade deals.

"He's worried about trade surpluses, trade deficits around the world. Well, they have a $2 billion surplus on steel with us. So it's not like the trade is imbalanced against the U.S. favor on this one,” Trudeau said.

The full interview with Trudeau will air Sunday on "Meet the Press with Chuck Todd." </s> Theresa May has hit back at Donald Trump’s “unjustified” decision to impose tariffs on steel and aluminium producers, which has pushed the EU to the brink of a trade war with the US.

In her first direct intervention, more than 24 hours after the US announced the tariffs would be imposed on the EU, Canada and Mexico, May said the US should immediately rethink its decision, warning it would have ramifications for US defence projects.

“I am deeply disappointed at the unjustified decision by the US to apply tariffs to EU steel and aluminium imports,” she said. “The US, EU and UK are close allies and have always promoted values of open and fair trade across the world.

“Our steel and aluminium industries are hugely important to the UK, but they also contribute to US industry including in defence projects which bolster US national security.”

May said the EU and UK “should be permanently exempted from tariffs” and Britain would work with the bloc to protect and safeguard workers and industries.

The EU has opened a case at the World Trade Organization after the US imposed a 25% duty on European steel and a 10% duty on European aluminium on Friday.

“We are not in a trade war, but we are in a very difficult situation caused by the United States,” said Cecilia Malmström, the EU trade commissioner. “The US is playing a dangerous game here.”

Wilbur Ross, the US commerce secretary, said insufficient progress had been made in talks with the EU, Canada and Mexico, since the US had agreed a temporary reprieve from the tariffs for the three close US allies after they were unveiled by Trump two months ago.

The Canadian prime minister, Justin Trudeau, issued an immediate tit-for-tat response, announcing tariffs of up to 25% on US imports equivalent to C$16.6bn, the total value of Canadian steel exports last year. The tariffs will cover steel and aluminium as well as orange juice, whiskey and other food products.

The EU is yet to announce its plans for retaliatory measures, although the president of the European commission, Jean-Claude Juncker, has promised imminent action. Targets are likely to be classic US products such as peanut butter, whiskey and Levi’s jeans, though under WTO rules, EU retaliatory measures cannot come into force until 20 June.

The tariffs are particularly damaging to the UK’s hopes of a trade liberalisation deal with the US after Brexit. Liam Fox, the international trade secretary, said the tariffs were “patently absurd” and that it would be “ a great pity if we ended up in a tit-for-tat trade dispute with our closest allies”.

May is expected to raise the tariffs directly with Trump when the pair meet at the G7 in Canada next week, where the issue is likely to dominate, though Downing Street has not ruled out the possibility of an earlier discussion.
Canadian Foreign Minister Chrystia Freeland announces dollar-for-dollar retaliatory tariffs of 10% or 25% on a list of goods – steel, aluminum, whiskey, orange juice and other food products – worth $16.6 billion. Prime Minister Justin Trudeau denounces an "affront" to the security partnership between the US and Canada.