US allies hit back at metal tariffs

Washington wants Canada and EU to do more to bring down trade surpluses

Canada, Mexico and the European Union retaliated against US tariffs on steel and aluminium with levies on billions of dollars of US goods from orange juice and whiskey to blue jeans and Harley-Davidson motorcycles.

The EU took the US to the World Trade Organisation to challenge the legality of the new tariffs.

Brussels lodged an eightpage list at the international trade body of goods it would hit with retaliatory measures. They run the gamut from big motorcycles like the Harleys, built on the home turf of House Speaker Paul Ryan, to “canoes”, “manicure or pedicure preparations” and even “sinks and washbasins, of stainless steel” — the proverbial kitchen sink.

Yesterday, Trump told Canada and the EU to do more to bring down their trade surpluses. He castigated Canada, saying it had treated US farmers “very poorly for a very long period of time”.

Gold fell yesterday after stronger than forecast US payrolls data boosted expectations that the Federal Reserve will press ahead with another US interest rate hike this month, lifting the dollar.

The metal is highly sensitive to rising rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Spot gold was down 0.3 per cent at $1,294.06 an ounce by 1322 GMT, having earlier edged just above $1,300 an ounce.

US gold futures for August delivery were down 0.4 per cent at $1,298.90 an ounce.

The dollar rose against the euro and Treasury yields hit session highs after the payrolls report showed the US economy added 223,000 jobs last month, well ahead of expectations for 188,000 jobs.

The stronger dollar is not playing in favour of higher gold prices, Capital Economics analyst Simona Gambarini said. “There is not much interest at the moment in getting into the gold market, with the Federal Reserve meeting just [a short way] away,” she said. “Investors are waiting to see whether the Fed will hike rates again, and what their take on inflation and those risks in Europe and with trade will be.”