US allies retaliate; levy tariffs on US goods

EU and China said they will deepen ties on trade and investment as a result

Washington, June 1: Countries around the world fought back Friday against President Donald Trump’s decision to slap tariffs on steel and aluminum imports, announcing retaliatory countermeasures and warning that the US plan will hurt US consumers.

French President Emmanuel Macron said in a statement on Friday that he told Trump in a phone call that the new US tariffs on European, Mexican and Canadian goods are illegal and a “mistake.” Macron pledged the riposte would be “firm” and “proportionate” and in line with World Trade Organisation rules.

Germany’s Volkswagen, Europe’s largest automak- er, warned that the decision could start a trade war that no side would win. The European Union and China said they will deepen ties on trade and investment as a result.

“This is stupid. It’s counterproductive,” former British trade minister Francis Maude told the BBC. “Any government that embarks on a protectionist path inflicts the most damage on itself,” he added.

Macron warned that “economic nationalism leads to war. This is exactly what happened in the 1930s.”

Trump’s move makes good on a his campaign promise to crack down on trading partners that he claims exploit poorly negotiated trade agreements to run up big trade surpluses with the US.

Commerce secretary Wilbur Ross says the tariffs — 25 per cent on imported steel, 10 per cent on aluminum from Canada, Mexico and the European Union — take effect Friday.

The import duties threaten to drive up prices for American consumers and companies and are likely to heighten uncertainty for businesses and investors around the globe. Stock prices slumped amid fears of a trade war, with the Dow Jones industrial average falling nearly 252 points, or 1 per cent, to 24,415.84.

Mexico complained that the tariffs will “distort international trade” and said it will penalise US imports including pork, apples, grapes, cheeses and flat steel.

In Canada, Prime Minister Justin Trudeau said Thursday that the tariffs were “totally unacceptable.” Canada announced plans to slap tariffs on $12.8 billion worth of US products, ranging from steel to yogurt and toilet paper. “Canada is a secure supplier of aluminum and steel to the US defense industry, putting aluminum in American planes and steel in American tanks,” Trudeau said.