Trump’s decision on tariffs closed doors to other talks - Macron

Europe economy

Krupp Kokerei Schwelgern steel plant on the river Rhine in Duisburg Germany

Mr Stace said it was "correct" for the European Union to pursue safeguards, but urged the countries to find a common solution that addresses the "root cause" of the issue.

In announcing his country's response, Canadian Prime Minister Justin Trudeau said it was "inconceivable" that "Canada could be considered a national security threat to the United States", noting that USA fighter planes and tanks contain Canadian steel.

The government said that Mexico's reciprocal tariffs would apply to steel flats, light bulbs, pork legs and shoulders, cold meats and prepared foods, apples, grapes, blueberries and a range of cheeses, among other products.

Tariffs have led to higher steel and aluminum prices in the United States, benefiting producers but potentially squeezing profit margins of large companies that use the metals.

The countries are major US steel and aluminum suppliers and both considered the threat of tariffs to be an irritant at best, an insult at worst. And he said that while he was looking forward to continuing negotiations, the U.S.is making its decision on national security grounds - a justification Foreign Affairs Minister Chrystia Freeland has dismissed as absurd.

The statement reiterated Mexico's openness to constructive dialogue with the United States, its support of global trade and its disapproval of unilateral protectionist measures.

The scene encapsulated months of growing perplexity in Europe about the Trump administration following its decisions to withdraw from a landmark global pact to fight climate change, abandon an worldwide accord to prevent Iran from acquiring nuclear weapons and threaten allies with tariffs defended on obscure national-security grounds.

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.

"The numbers are clear: The United States has a $2 billion USA dollars surplus in steel trade with Canada - and Canada buys more American steel than any other country in the world, half of U.S. steel exports".

In the intervening period, Trump has been hot and cold on the future of the trilateral agreement, saying last month that a deal could be reached "fairly soon" while at times threatening to terminate the 24-year-old treaty. "We're seeing very strong demand, but regrettably, I'm hearing from customers that they are holding off on spending or choosing to spend in the U.S. That message is getting stronger".

European and United States equities lost ground slightly on fears the United States measures could spark a trade war. The Dow fell about 200 points.

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The tariffs will start Friday.

The European Union notes the tariffs affect exports worth €6.4 ($7.4) billion and they will launch legal proceedings against the United States in the World Trade Organization tomorrow.

"This is protectionism, pure and simple", European Commission President Jean-Claude Juncker said in a statement.

Justin Trudeau says he abandoned a proposed meeting with Donald Trump in Washington this week after the White House insisted that the prime minister first agree to a five-year "sunset clause" in a renegotiated NAFTA. This will force them to cut jobs, economists and industry officials say. "These tariffs are totally unacceptable".

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.

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.

"If any of these parties does retaliate, that does not mean that there can not be continuing negotiations", Ross said.

Meanwhile, the White House also announced it may also introduce new tariffs on Chinese imports as well as restrictions on intellectual property - a move that would make good on promises President Trump made during his campaign. He said he would travel to China on Friday for trade talks this weekend.

The United States is also exploring the possibility of putting new tariffs on cars.

The investigation announced by the Department of Commerce on May 23rd, into whether imports of cars and auto parts threaten national security, is illustrative.

Canada and Mexico have both opposed the notion of a sunset clause for NAFTA, arguing that it would do away with assurances for businesses and make regulatory compliance hard.

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