Allies retaliate after U.S. steel tariffs take effect for Europe, Mexico and Canada

WASHINGTON – In a move that sharply escalates trade tensions with America’s closest allies, the Trump administration said Thursday it would allow steep tariffs to take effect on imported steel from the European Union, Canada and Mexico.

That prompted swift retaliatory actions and raised the specter of an expanding global trade war, triggered by the U.S.

Despite last-ditch meetings in Europe and pleas from trading partners, as well as repeated vows of retaliation, the administration said it would not extend for a third time temporary tariff exemptions on steel and aluminum, which expire at midnight Friday.

Canadian leaders reacted angrily to the tariffs, especially because Trump justified them on the grounds of national security, a line of reasoning that Canadian officials called absurd, illogical and illegal. Canada, the largest exporter of steel and aluminum to the United States, said it would apply countertariffs on $16.6 billion worth of American metals and other products, to take effect July 1.

“That Canada could be a national security threat to the U.S. is inconceivable,” said Canadian Prime Minister Justin Trudeau, noting the many Canadians who have died alongside U.S. soldiers in joint military operations over the years. “These tariffs are an affront.”

EU leaders have been bracing for the duties – 25 percent on steel and 10 percent on aluminum – and already had drawn up a list of American products worth several billions of dollars that would be subject to tariffs. Among the imports that would be targeted are such iconic American products as jeans, Kentucky bourbon and Harley-davidson motorcycles – products aimed at applying maximum political pressure as they are produced in home states of top lawmakers.

European officials on Thursday met with U.S. Commerce Secretary Wilbur Ross in Paris in an effort to dissuade the administration from going through with the tariffs, but Ross was unmoved and, in a call with reporters from Paris, he announced that the tariffs would be imposed.

Earlier he had suggested that negotiations could continue even after the tariffs are imposed, but EU officials had insisted that the threat of metal tariffs must be lifted before broader negotiations could take place.

Ross, asked about concerns of retaliation that would target farm goods and other U.S. products, said: “Let’s see what evolves going forward.”

The tariffs also are likely to complicate ongoing negotiations with Canada and Mexico to reform the North American Free Trade Agreement. The Trump administration made it no secret that the threat of steel and aluminum tariffs was intended as a lever to win concessions from Canada and Mexico.