Canada, EU hit back at US with tariffs as trade war escalates

The European Union and Canada on Wednesday placed new trade duties on about $49 billion worth of U.S. goods in response to President Donald Trump’s metals tariffs.

The U.S. at midnight began imposing 25% tariffs on all steel and aluminum imports from all trading partners without exception, the White House said.

“For years, the European Union has opposed the United States’ efforts to reindustrialize. The EU has rejected attempts under successive U.S. administrations to cooperate effectively on dealing with global excess capacity on steel, aluminum, and other sectors, employing measures that are too little and too late,” U.S. Trade Representative Jamieson Greer said in a news release. “If the EU acted as quickly to address global excess capacity as it does to punish the United States, we likely would be in a different situation today. The EU’s punitive action completely disregards the national security imperatives of the United States – and indeed international security – and is yet another indicator that the EU’s trade and economic policies are out of step with reality.”

The EU has responded to Trump’s metals duties with countertariffs on $28 billion in U.S. goods.

Ursula von der Leyen, president of the European Commission, defended the EU’s actions. The European Commission is the primary executive arm of the European Union.

“As of this morning the United States is applying a 25% tariff on imports of steel and aluminium. We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up. In Europe and in the United States. The Commission must act to protect consumers and business,” von der Leyen said in a news release. 

Canada on Wednesday announced tariffs on $21 billion worth of U.S. goods in response to Trump’s steel and aluminum duties.

“The U.S. administration is once again inserting disruption and disorder into an incredibly successful trading partnership and raising the costs of everyday goods for Canadians and American households alike,” François-Philippe Champagne, Canada’s minister of innovation, science and industry, said at a news conference, according to NBC.

Related: Ontario drops surcharge on electricity sales under threat of US retaliation

Ontario, Canada, on Tuesday dropped a 25% surcharge it had planned to place on electricity sold to the U.S., in response to an announcement by Trump that he would impose a 50% rather than 25% tariff on steel and aluminum imports from Canada, The Associated Press reported. NBC News later reported that Trump appeared to back away from imposing the 50% tariff.

The EU said it will allow the suspension of existing 2018 and 2020 countermeasures against the U.S. to lapse on  April 1. Those tariffs target a range of U.S. products that respond to the economic harm done on $8.7 billion of European steel and aluminium exports, the European Commission said.

In response to new U.S. tariffs affecting more than $19.6 billion of EU exports, the EU is moving forward with a package of new countermeasures on U.S. exports that will come into force by mid-April.

In addition to steel and aluminum retaliatory tariffs announced by Canada and the EU,  both countries are implementing duties that could affect U.S. exports such as beef, motorcycles and whiskey.

Trump paused until April 2 across-the-board tariffs that had been set for March 4 on goods from Canada and Mexico that comply with the United States-Mexico-Canada Agreement. However, he said he is considering imposing reciprocal tariffs on Canadian lumber and dairy products soon.

Trump imposed a 10% tariff on Chinese goods in February and doubled the rate to 20% on Tuesday. China has responded with up to 15% duties on U.S. foods such as beef, chicken and pork that began Monday.

The import duties on goods from Canada, China and Mexico are aimed at forcing more cooperation from those countries on stopping illegal immigration and drug smuggling into the U.S., the White House said.

Related: Trump pauses tariffs on all imports from Canada, Mexico for 1 month

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