President Trump is imposing steep tariffs on steel and aluminum from three of America's biggest trading partners — Canada, Mexico and the European Union.

The trade penalties, 25% on imported steel and 10% on imported aluminum, take effect at midnight, Commerce Secretary Wilbur Ross told reporters Thursday.

The announcement immediately raised the risk of retaliatory tariffs against American products.

Trump announced worldwide steel and aluminum tariffs in March but granted exemptions to some major trading partners.

Canada, Mexico and the EU were among the countries granted relief while the United States pursued negotiations to address the administration's concerns about the state of domestic steel and aluminum production. Those negotiations had a Friday deadline.

Trump's decision could raise prices for Americans on a range of everyday products. It could also place the United States in a trade dispute on more than one front. The administration is separately moving ahead with tariffs on Chinese goods.

Trump imposed the steel and aluminum penalties under a 1962 law that gives the president broad power to increase or reduce tariffs on goods deemed critical to national security.

"We take the view that without a strong economy, you cannot have strong national security," Ross told reporters.

Trump's announcement lifted American steel and aluminum stocks because those companies stand to benefit from penalties against their foreign competitors. U.S. Steel climbed 3%. But the broader market sank because of trade war fears. The Dow fell about 200 points.

Europe had promised swift retaliation if it was hit with the trade penalties, and had warned it could quickly respond with 25% tariffs on US products such as motorcycles, denim, cigarettes, cranberry juice and peanut butter.

Getting rid of the exemptions for Canada and Mexico, meanwhile, could complicate ongoing negotiations on NAFTA. Canada had also pledged to retaliate.

"Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers," Canadian Foreign Minister Chrystia Freeland said in March.

The NAFTA talks were one factor in the administration's decision to grant exemptions to Canada and Mexico from the steel and aluminum tariffs. But Ross said Thursday that those talks "are taking longer than we hoped."

Related: The global steel industry by the numbers

Canada was the largest exporter of steel to the United States by value last year, according to data from Wood Mackenzie. Mexico was the third largest, behind South Korea.

The Trump administration said Tuesday that it is moving forward with tariffs on $50 billion worth of Chinese goods as punishment for intellectual property theft.

The Chinese government said the announcement was "obviously in violation of the consensus reached in Washington recently by both China and the United States." Both parties had previously said that tariffs would be put on hold as talks continued.

Ross is scheduled to go to China this weekend for a third round of negotiations.

The United States is also exploring the possibility of putting new tariffs on cars. Last week, The Trump administration announced an investigation into whether automobile imports are hurting US national security, laying the groundwork for another trade fight.

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

— CNNMoney's Alanna Petroff, Nathaniel Meyersohn and Matt Egan contributed to this report.</s>Harley-Davidson Inc on Friday warned of a "significant impact" on its sales after the European Union revealed plans to increase duties on a range of U.S. imports, including big motorcycles, in reprisal for Washington's new tariffs on EU metal exports.

REUTERS: Harley-Davidson Inc on Friday warned of a "significant impact" on its sales after the European Union revealed plans to increase duties on a range of U.S. imports, including big motorcycles, in reprisal for Washington's new tariffs on EU metal exports.

After failing to win trade concessions, the Trump administration on Thursday withdrew the exemptions given to the steel and aluminum imports from the EU, Canada and Mexico from global tariffs that it imposed in March citing national security concerns.

The EU took the United States to the World Trade Organization to challenge the legality of the new tariffs and the Trump administration's national-security justification. Brussels has submitted an eight-page list to the international trade body, covering goods it would hit with retaliatory measures.

The list includes U.S. exports running the gamut from big motorcycles like Harley's, built on the home turf of U.S. House of Representatives Speaker Paul Ryan, to "canoes", "manicure or pedicure preparations" and even "sinks and washbasins, of stainless steel" - the proverbial kitchen sink.

"We support free and fair trade and hope for a quick resolution to this issue," Harley said in a statement.

"We believe a punitive, retaliatory tariff on Harley-Davidson motorcycles in any of our major markets would have a significant impact on our sales, our dealers, our suppliers and our customers in those markets," the statement said.

Harley said it was currently evaluating options for managing anticipated cost increases following the EU's proposed measure.

Shares of the Milwaukee, Wisconsin-based company were down nearly 2 percent in Friday afternoon trade.

Struggling to overcome a slump in U.S. demand, Harley has been aiming to boost sales of its iconic motorcycles overseas to 50 percent of total annual volume from about 43 percent currently. Europe, the Middle East and Africa accounted for little over 21 percent of its global retail sales in the last quarter.

When U.S. President Donald Trump took office last year he vowed to make Harley great again.

However, in late April, the company said Trump's tariffs of 25 percent on steel imports and 10 percent on aluminum would inflate its costs by an additional US$15 million to US$20 million this year on top of already rising raw material prices that it expected at the start of the year.

"We believe import tariffs on steel and aluminum will drive up costs for all products made with these raw materials, regardless of their origin," the company said.</s>Justin Trudeau’s reputation as the “Trump whisperer” looks to be in tatters after the U.S. president rebuffed efforts by Canada to have the two leaders meet this week in Washington, and the concern in Ottawa is that the meeting of the heads of G7 governments in Charlevoix, Que. next week — the pinnacle of Canada’s G7 presidency — may also be teetering on disaster.

On Thursday morning U.S. Commerce Secretary Wilbur Ross announced sweeping tariffs on steel and aluminum imports from Canada, Mexico and the European Union. It appears Trudeau was unable to repeat the eleventh-hour intervention which in March earned Canada a temporary exemption from the U.S.’s blanket tariffs of 25 per cent on steel and 10 per cent on aluminum. That reprieve was tied to a renewed North American Free Trade Agreement, but a deal has not been forthcoming and is not expected anytime soon. Ross cited a lack of progress on NAFTA, as well as national security concerns, as the reasons for the tariffs.

“There was a fair bit of effort to get Trudeau to Washington but it didn’t materialize,” said one person familiar with the matter. “Reasonable speculation is that the Americans didn’t want to give us another extension.”

The fear in Ottawa is that the tariffs will create such a hostile environment for Trump in Charlevoix that he may not even show up. France immediately labelled the U.S.’s actions “unjustifiable and dangerous.”

It is expected that if all sides do attend, Canada will try to act as an honest broker and attempt to work out a compromise — but the prime minister’s influence with the Trump Administration may not be what it was.

One senior official said the idea that Trump rebuffed Trudeau is inaccurate. The two men have spoken 30 times as leaders, the official said, and had talked about meeting if there was an end point in sight to the NAFTA negotiations. However, Trump has rejected the idea of a “skinny” NAFTA — essentially a deal on autos and agricultural access that would not require Congressional approval. As such, the two sides decided it was not the right time to get together.

“It’s fair to say it’s not going to come together imminently,” said the official. “The U.S. is still looking for unilateral wins.”

Trump remains rigid on his insistence on a sunset clause that would require a renegotiation of the trade deal every five years, and on ditching the Chapter 19 dispute-resolution clause that created the bi-national expert panel which adjudicates trade disagreements between NAFTA member nations.

That may be the case, but when the U.S. granted Canada its exemption in March, Canadian officials were quick to credit Trudeau’s call to Trump as the pivotal intervention.

The failure to repeat the feat suggests that Trudeau’s powers of persuasion with the president are waning while the influence of the arch-protectionists around Trump, like U.S. Trade Representative Robert Lighthizer, are waxing.

Lighthizer is the first USTR in American history who appears to want to roll back trade liberalization and re-balance U.S. trade policy by forcing American multinationals investing overseas to repatriate their capital.

Canada is keen to portray the new tariffs as a U.S. decision aimed at the whole world, rather than something that is Canada-specific. But it is clear that the tariff exemption was being used as a bargaining chip in the NAFTA negotiations.

Those negotiations are now at an impasse. Chrystia Freeland, the Global Affairs minister, returned to Ottawa from Washington after a two hour meeting with Lighthizer Wednesday, with nothing much to show for her trip. The two countries remain at loggerheads over a range of issues beyond the sunset clause and Chapter 19, including government procurement and intellectual property provisions.

Speculation in Ottawa suggests Lighthizer doesn’t want a deal and believes a Democrat-dominated House of Representatives that may emerge after the U.S. mid-term elections in November could give him leverage to extract an even better deal.

The real fear is not steel and aluminum tariffs but the threat of import vehicle tariffs of up to 25 per cent on autos entering the U.S. Earlier this month, Trump ordered Ross to launch an investigation into car and truck imports under an obscure provision in U.S. trade law that allows it to levy tariffs on imports it deems a threat to national security.

“That is exponentially more significant,” said one source.

The threat of higher duties has led to much hand-wringing inside government about how to respond without hurting Canadian producers. “This government has been remarkably constructive — no public positions criticizing the Americans or making fun of Trump. They have done everything humanly possible to deal rationally with this Trump administration. But at what point does Canada say, ‘Enough is enough?’” said the source.

In the event Ottawa decides to act, the government has already drawn up plans for retaliatory measures that would impose quotas on U.S. steel. A registered notice of targeted products, not limited to steel, has been drawn up and is ready to go.

Surreal as it may seem, Canada is about to engage in a trade war with the United States.</s>By KEN THOMAS and ANGELA CHARLTON , Associated Press

WASHINGTON (AP) — President Donald Trump’s administration is planning to impose tariffs on European steel and aluminum imports after failing to win concessions from the European Union, a move that could provoke retaliatory tariffs and inflame trans-Atlantic trade tensions.

U.S. and European officials held last-ditch talks in Paris on Thursday to try to reach a deal, though hopes are low and fears of a trade war are mounting.

“Global trade is not a gunfight at the OK Corral,” France’s finance minister quipped after meeting U.S. Commerce Secretary Wilbur Ross. “It’s not about who attacks whom, and then wait and see who is still standing at the end.”

The tariffs are likely to go into effect on the EU with an announcement before Friday’s deadline, according to two people familiar with the discussions. The administration’s plans could change if the two sides are able to reach a last-minute agreement, said the people, who spoke only on condition of anonymity to discuss internal deliberations.

Ross told Le Figaro newspaper that the announcement would come Thursday, likely after markets close, and that the Americans remain open to negotiations.

German Chancellor Angela Merkel stressed her opposition to the tariffs Thursday.

“We believe these tariffs aren’t compatible with WTO rules,” she said in Lisbon. EU leaders want “exceptions from these tariffs and have offered to hold talks on a certain basis.”

But if there are no exemptions, she said, “We will respond in an intelligent, decisive and joint way.”

EU Commission spokesman Margaritis Schinas said Thursday the European side is “ready to deal with any kind of scenario, and to defend the EU interests and international trade law.”

Trump announced in March that the United States would slap a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, citing national security interests. But he granted an exemption to the EU and other U.S. allies; that reprieve expires Friday.

“Realistically, I do not think we can hope” to avoid either U.S. tariffs or quotas on steel and aluminum, said Cecilia Malmstrom, the European Union’s trade commissioner. Even if the U.S. were to agree to waive the tariffs on imported steel and aluminum, Malmstrom said, “I expect them nonetheless to want to impose some sort of cap on EU exports.”

Malmstrom is meeting U.S. Trade Representative Robert Lighthizer in Paris on Thursday among other international trade chiefs.

If the U.S. moves forward with its tariffs, the EU has threatened to impose retaliatory tariffs on U.S. orange juice, peanut butter and other goods in return.

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.

French Finance Minister Bruno Le Maire called the U.S. tariffs “unjustified, unjustifiable and dangerous.”

“This will only lead to the victory of those who want less growth, those who don’t think we can develop our economies across the world. We think on the contrary that global trade must have rules in a context of multilateralism. We are ready to rebuild this multilateralism with our American friends,” he said.

Tariffs on steel and aluminum imports to the U.S. can help local producers of the metals by making foreign products more expensive. But they can also increase costs more broadly for U.S. manufacturers who cannot source all their needs locally and have to import the materials. That hurts the companies and can lead to more expensive consumer prices, economists say.

“Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade. Nothing,” French President Emmanuel Macron said in an impassioned speech Wednesday.

In a clear reference to Trump, Macron added: “These solutions might bring symbolic satisfaction in the short term. … One can think about making voters happy by saying, ‘I have a victory, I’ll change the rules, you’ll see.'”

But Macron said those “who waged bilateral trade wars … saw an increase in prices and an increase in unemployment.”

Besides the U.S. steel and aluminum tariffs, the Trump administration is also investigating possible limits on foreign cars in the name of national security.

Ross criticized the EU for its tough negotiating position. But German Economy Minister Peter Altmaier insisted the Europeans were ready to negotiate special trade arrangements, notably for liquefied natural gas and industrial goods, including cars.

Charlton reported from Paris. Alex Turnbull in Paris, Paul Wiseman and Jill Colvin in Washington, Raf Casert in Brussels and Barry Hatton in Lisbon contributed to this report.</s>"No facts. No consequences. They can just have a cartoon," Obama said, according to adviser Ben Rhodes' new book, "The World as It Is."

"No facts. No consequences. They can just have a cartoon," Obama said, according to adviser Ben Rhodes' new book, "The World as It Is."

Obama referred to Trump as 'cartoon' after election, according to adviser's book

Obama referred to Trump as 'cartoon' after election, according to adviser's book

President Donald Trump's go-to fast food meals could be getting swapped out for healthier options.

President Donald Trump's go-to fast food meals could be getting swapped out for healthier options.

U.S. and European trade chiefs are meeting hours before the U.S. is expected to impose tariffs on European steel and aluminum.

U.S. and European trade chiefs are meeting hours before the U.S. is expected to impose tariffs on European steel and aluminum.

(AP Photo/Mark Schiefelbein, File). FILE - In this May 4, 2018, file photo, U.S. Commerce Secretary Wilbur Ross leaves his hotel in Beijing. An American business group appealed to China to allow more access to its state-dominated economy ahead of a vis...

(AP Photo/Mark Schiefelbein, File). FILE - In this May 4, 2018, file photo, U.S. Commerce Secretary Wilbur Ross leaves his hotel in Beijing. An American business group appealed to China to allow more access to its state-dominated economy ahead of a vis...

The Latest: Europe ready to retaliate after new US tariffs

The Latest: Europe ready to retaliate after new US tariffs

The talks come as preparations for the highly anticipated summit in Singapore were barreling forward on both sides of the Pacific Ocean, despite lingering uncertainty about whether it will really occur, and when.

The talks come as preparations for the highly anticipated summit in Singapore were barreling forward on both sides of the Pacific Ocean, despite lingering uncertainty about whether it will really occur, and when.

(AP Photo/Andres Kudacki). North Korea's Kim Yong Chol, center, leaves a hotel in New York, Wednesday, May 30, 2018. The senior North Korean official arrived in New York on Wednesday in the highest-level official visit to the United States in 18 years,...

(AP Photo/Andres Kudacki). North Korea's Kim Yong Chol, center, leaves a hotel in New York, Wednesday, May 30, 2018. The senior North Korean official arrived in New York on Wednesday in the highest-level official visit to the United States in 18 years,...

Sources say Deputy Attorney General Rod Rosenstein indicated he was initially asked to reference the Russia investigation in his own memo on Comey, but the final version only referenced the Clinton email investigation.

Sources say Deputy Attorney General Rod Rosenstein indicated he was initially asked to reference the Russia investigation in his own memo on Comey, but the final version only referenced the Clinton email investigation.

(AP Photo/Alex Brandon, File). FILE - In this June 7, 2017, file photo, FBI acting director Andrew McCabe listens during a Senate Intelligence Committee hearing about the Foreign Intelligence Surveillance Act, on Capitol Hill in Washington. McCabe draf...

(AP Photo/Alex Brandon, File). FILE - In this June 7, 2017, file photo, FBI acting director Andrew McCabe listens during a Senate Intelligence Committee hearing about the Foreign Intelligence Surveillance Act, on Capitol Hill in Washington. McCabe draf...

(Philippe Wojazer/Pool Photo via AP). French President Emmanuel Macron, right, and Organisation for Economic Co-operation and Development (OECD) Secretary-General Angel Gurria arrive at the OECD ministerial council meeting.

(Philippe Wojazer/Pool Photo via AP). French President Emmanuel Macron attends the OECD ministerial council meeting on "Refounding Multilateralism," in Paris, France, Wednesday, May 30, 2018.

(AP Photo/Susan Walsh). President Donald Trump walks with Health and Human Services Secretary Alex Azar as they arrive for the White House Sports and Fitness Day event on the South Lawn of the White House in Washington, Wednesday, May 30, 2018.

WASHINGTON (AP) - The Trump administration announced Thursday it will impose tariffs on steel and aluminum imports from Europe, Mexico and Canada after failing to win concessions from the American allies. Europe and Mexico pledged to retaliate quickly, exacerbating trans-Atlantic and North American trade tensions. Financial markets fell amid fears of a trade war.

Commerce Secretary Wilbur Ross said the tariffs would be 25 percent on steel and 10 percent on aluminum, and go into effect on Friday, as the administration followed through on the penalties after earlier granting exemptions to buy time for negotiations. President Donald Trump had announced the tariffs in March, citing national security concerns.

The European Commission's president, Jean-Claude Juncker, said Trump's decision amounted to trade protectionism and that Europe would respond with countermeasures. "This is protectionism, pure and simple," Juncker said. Mexico said it would penalize U.S. imports including pork bellies, apples, grapes, cheeses and flat steel.

The U.S. action widens a rift with America's closest allies, threatens to drive up prices for companies and consumers that buy steel and aluminum, heightens uncertainty for businesses and is already alarming investors in global financial markets.

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

The tariffs directed at some of the U.S.'s most ardent allies represented the latest move in Trump's "America First" agenda that has roiled financial markets and raised the specter of a trade war involving the U.S., China and some of the globe's most dominant economies.

The trade actions have opened the U.S. to criticism that it's burning bridges at a time when Trump is seeking to rid North Korea of nuclear weapons and help stabilize the Middle East.

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

Ross told reporters that talks with Canada and Mexico over revising the North American Free Trade Agreement were "taking longer than we had hoped." Talks with Europe had "made some progress" but not enough for additional exemptions, he said in a conference call from Paris.

"We continue to be quite willing and indeed eager to have further discussions," Ross said. He said he planned to travel to China on Friday for trade talks between the world's two biggest economies.

European officials, bracing for the tariffs, have threatened to retaliate against U.S. orange juice, peanut butter, kitchenware, clothing and footwear, washing machines, textiles, whiskey, motorcycles, boats and batteries.

In terms of the NAFTA talks, the tariffs could hinder the negotiations among the North American neighbors. Ross said there was "no longer a very precise date when they may be concluded and therefore (Canada and Mexico) were added into the list of those who will bear tariffs."

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

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 and Canada said before the announcement that it would respond in kind.

"Canada considers it frankly absurd that we would in any way be considered to be a national security threat to the United States," Canadian Foreign Minister Chrystia Freeland said before the tariffs were announced. "The government is absolutely prepared to and will defend Canadian industries and Canadian jobs. We will respond appropriately."

German Chancellor Angela Merkel stressed her opposition even before the U.S. announcement, saying the looming tariffs were incompatible with World Trade Organization rules. She said if there were no exemptions, "We will respond in an intelligent, decisive and joint way."

France's finance minister, Bruno Le Maire, called the U.S. tariffs "unjustified, unjustifiable and dangerous."

"This will only lead to the victory of those who want less growth, those who don't think we can develop our economies across the world. We think on the contrary that global trade must have rules in a context of multilateralism. We are ready to rebuild this multilateralism with our American friends," he said.

The EU trade commissioner, Cecilia Malmstrom, said the EU "did everything to avoid this outcome." Noting her discussions with U.S. officials, she said. "I have argued for the EU and the US to engage in a positive trans-Atlantic trade agenda, and for the EU to be fully, permanently and unconditionally exempted from these tariffs."

Even some Trump allies in Congress said the trade moves were misguided. "Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers," said Sen. Orrin Hatch, R-Utah.

White House spokesman Raj Shah told Fox News: "The president's actions are about protecting American steel, American aluminum. They're critical for national security."

Tariffs on steel and aluminum imports to the U.S. can help local producers of the metals by making foreign products more expensive. But they can increase costs more broadly for U.S. manufacturers that cannot source all their needs locally and have to import the materials. That hurts the companies and can lead to more expensive consumer prices, economists say.

"Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade. Nothing," French President Emmanuel Macron said Wednesday.

In a clear reference to Trump, Macron added: "These solutions might bring symbolic satisfaction in the short term. ... One can think about making voters happy by saying, 'I have a victory, I'll change the rules, you'll see.'"

But Macron said those "who waged bilateral trade wars ... saw an increase in prices and an increase in unemployment."

Besides the U.S. steel and aluminum tariffs, the U.S. is also investigating possible limits on foreign cars in the name of national security.

Ross criticized the EU for its tough negotiating position. But German Economy Minister Peter Altmaier insisted the Europeans were ready to negotiate special trade arrangements, notably for liquefied natural gas and industrial goods, including cars.

Cook reported from Brussels. Associated Press writers Angela Charlton and Alex Turnbull in Paris, Paul Wiseman, Jill Colvin and Kevin Freking in Washington, Raf Casert in Brussels, Christopher Sherman in Mexico City and Barry Hatton in Lisbon, Portugal, contributed to this report.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.</s>The United States will announce plans to impose tariffs on steel and aluminium from the European Union as early as Thursday morning, two people briefed on the matter said, confirming a report in the Wall Street Journal.

The decision would land ahead of a Friday expiration deadline for exemptions to the planned metals tariffs amid stalled trade talks with the EU and would likely prompt retaliation from the bloc.

The two sources said an announcement was planned for Thursday morning in Washington but that the timing could still change.

The US Commerce Department and US Trade Representative’s Office did not immediately respond to requests for comment.

President Donald Trump on March 23rd imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium, but granted temporary exemptions to the EU, Canada, Mexico, Brazil, Australia and Argentina.

Trump invoked a 1962 trade law to erect protections for US steel and aluminium producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China.

The European Commission, which coordinates trade policy for the 28 EU members, has said the bloc should be permanently exempted from the tariffs since it was not the cause of overcapacity in steel and aluminium.

The Commission has said the EU will set duties on €2.8 billion of US exports, including peanut butter and denim jeans, if its metals exports to the United States worth €6.4 billion are subject to tariffs.

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

Economists say the standoff with the EU could tip toward a trade war, particularly after Trump last week launched another national security investigation into car and truck imports that could lead to new US 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.

Friday’s deadline for exemptions also affects Mexico and Canada, which are in contentious negotiations with the United States on the North American Free Trade Agreement that Trump has said he wants to revamp, or abandon if the talks fail. – Reuters</s>Thursday, May 31, 2018 at 3:22 am |

President Donald Trump’s administration is planning to impose tariffs on European steel and aluminum imports after failing to win concessions from the European Union, a move that could provoke retaliatory tariffs and inflame trans-Atlantic trade tensions.

The tariffs are likely to go into effect on the EU with an announcement by Friday’s deadline, according to two people familiar with the discussions. The administration’s plans could change if the two sides are able to reach a last-minute agreement, said the people, who spoke on condition of anonymity to discuss internal deliberations.

Trump announced in March the United States would slap a 25 percent tariff on imported steel, and a 10 percent tariff on imported aluminum, citing national security interests. But he granted an exemption to the EU and other U.S. allies; that reprieve expires Friday.

Europe has been bracing for the U.S. to place the restrictions even as top European officials have held last-ditch talks in Paris with American trade officials to try to avert the tariffs.

“Realistically, I do not think we can hope” to avoid either U.S. tariffs or quotas on steel and aluminum, said Cecilia Malmstrom, the European Union’s trade commissioner. Even if the U.S. were to agree to waive the tariffs on imported steel and aluminum, Malmstrom said, “I expect them nonetheless to want to impose some sort of cap on EU exports.”

European officials said they expected the U.S. to announce its final decision Thursday. The people familiar with the talks said Trump could make an announcement as early as Thursday.

U.S. Commerce Secretary Wilbur Ross attended meetings at the Organization for Economic Cooperation and Development in Paris on Wednesday, and U.S. Trade Representative Robert Lighthizer joins discussions in Paris on Thursday.

The U.S. plan has raised the threat of retaliation from Europe and fears of a global trade war — a prospect that is already weighing on investor confidence and could hinder the global economic upturn.

If the U.S. moves forward with its tariffs, the EU has threatened to impose retaliatory tariffs on U.S. orange juice, peanut butter and other goods in return. French Finance Minister Bruno Le Maire pledged that the European response would be “united and firm.”

Besides the U.S. steel and aluminum tariffs, the Trump administration is also investigating possible limits on foreign cars in the name of national security.

“Unilateral responses and threats over trade war will solve nothing of the serious imbalances in the world trade. Nothing,” French President Emmanuel Macron said in an impassioned speech at the Organization for Economic Cooperation and Development in Paris.

In a clear reference to Trump, Macron added, “These solutions might bring symbolic satisfaction in the short term. … One can think about making voters happy by saying, ‘I have a victory, I’ll change the rules, you’ll see.'”

But, Macron said, those “who waged bilateral trade wars … saw an increase in prices and an increase in unemployment.”

Tariffs on steel imports to the U.S. can help local producers of the metal by making foreign products more expensive. But they can also increase costs more broadly for U.S. manufacturers who cannot source all their steel locally and need to import the raw material. That hurts the companies and can lead to more expensive consumer prices, economists say.

Ross criticized the EU for its tough negotiating position.

“There can be negotiations with or without tariffs in place. There are plenty of tariffs the EU has on us. It’s not that we can’t talk just because there’s tariffs,” he said. He noted that “China has not used that as an excuse not to negotiate.”

But German Economy Minister Peter Altmaier insisted the Europeans were being “constructive” and were ready to negotiate special trade arrangements, notably for liquefied natural gas and industrial goods, including cars.

Macron also proposed to start negotiations between the U.S., the EU, China and Japan to reshape the World Trade Organization to better regulate trade. Discussions could then be expanded to include other countries to agree on changes by the end of the year.

Ross expressed concern that the Geneva-based World Trade Organization and other organizations are too rigid and slow to adapt to changes in global business.

“We would operate within [multilateral] frameworks if we were convinced that people would move quickly,” he said.

Ross and Lighthizer seemed like the odd men out at this week’s gathering at the OECD, an international economic agency that includes the U.S. as a prominent member.

The agency issued a report Wednesday saying “the threat of trade restrictions has begun to adversely affect confidence” and tariffs “would negatively influence investment and jobs.”</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>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.</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)
United States tariffs of 25% on steel and 10% on aluminium imports from Canada, Mexico and the European Union are set to take effect at midnight.