Economy

US hits EU, Canada and Mexico with steel, aluminum tariffs

US hits EU, Canada and Mexico with steel, aluminum tariffs

Financial markets fell amid fears of a trade war.

Mexican Foreign Minister Luis Videgaray said the country will continue negotiating with the United States to revamp the North American Free Trade Agreement despite "unjust and unilateral" tariff measures by the US government.

But he granted an exemption to the European Union and other US allies and that reprieve expires on Friday.

Mexico has also responded, promising to slap tariffs on USA products including pork bellies, grapes, apples, and flat steel.

European Commission President Jean-Claude Juncker said: "This is protectionism, pure and simple".

Brussels has already announced that it would target Levi's jeans, Harley Davidson motorbikes and bourbon whiskey.

The European Union (EU) has retaliated to US President Donald Trump extending tariffs on steel and aluminium to the bloc, confirming it is launching a dispute settlement case and adding further taxes to US imports.

Ross said that Argentina, Australia and Brazil will continue to be exempt from the tariffs though there have been "limitations" implemented "on the volume [of steel and aluminum] they can ship to the U.S".

Ross said the US would consider the effect of those measures.

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. Canada is the biggest steel exporter to the U.S.

German Chancellor Angela Merkel expressed opposition to the rising trade tensions before the USA announcement.

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. Ross is leaving Friday for Beijing for talks aimed at preventing a trade war with China.

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The tariffs represented the latest tactic in Mr Trump's "America First" agenda, which has unnerved traders and investors and raised the spectre of a trade war involving the USA and China - the world's two largest economies - as well as other key nations. But the NAFTA talks stalled.

"The talks are taking longer than we had hoped".

The move is likely to trigger serious retaliation from the three countries and push the USA to the edge of a trade war. But the two sides could not reach an agreement.

Trudeau wrote on Twitter: "American tariffs on Canadian aluminum & steel are unacceptable".

As a member of the EU, UK producers will be affected by the added cost to American importers, which could lead to a decline in demand for UK steel and aluminium, potentially affecting thousands of jobs. "Much of it will come to the European Union because we are still very open and a liberalised trading block".

The tariffs will start Friday.

Canadian and Mexican officials also threatened retaliatory responses but have as yet not indicated which USA products they will target.

The Mexican government said it would levy import taxes on USA exports of pork bellies, apples, cranberries, grapes, certain cheeses, and various types of steel.

Measured purely in dollars, the tariffs don't amount to much in America's $20 trillion economy.

"It does look as if Donald Trump's administration is going to take the route of conflict on trade".

"Mexico has indicated on repeated occasions that this type of measure under the criteria of national security are not adequate nor justified", the government said in a statement.

The tariffs, which have increased friction with USA trading partners worldwide and prompted several challenges before the World Trade Organization, are aimed at allowing the U.S. steel and aluminium industries to increase their capacity utilization rates above 80% for the first time in years.


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