Stocks Fall As Trump, Trade Partners Intensify Tariff Spat

Jean-Claude Juncker was speaking in Strasbourg this morning

Jean-Claude Juncker was speaking in Strasbourg this morning

In response, European Union chief Juncker said the United States tariffs decision leaves the bloc with "no choice" but to impose counter-measures and pursue a case in the World Trade Organisation.

Mexican Foreign Minister Luis Videgaray said the country will continue negotiating with the United States to revamp the North American Free Trade Agreement despite "unjust and unilateral" tariff measures by the US government.

"The United States now leaves us with no choice but to proceed with a WTO dispute settlement case and with the imposition of additional duties on a number of imports from the United States", Juncker said in a statement.

President Donald Trump Thursday imposed tariffs on imported steel and aluminium from the European Union, Canada and Mexico, triggering immediate retaliation from United States allies against American businesses and farmers.

The European Union has said that its retaliatory measures, which could be in place as soon as June 20, would include 25% tariffs on American products including motorcycles, denim, cigarettes, cranberry juice and peanut butter.

"We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved", Ross said.

Mexico has also announced retaliatory tariffs on U.S. imports including pork bellies, apples, grapes, cheese and flat steel, according to a statement from Mexico's Economy Ministry.

The tariffs are aimed at allowing the US steel and aluminum industries to increase their capacity utilization rates above 80 percent for the first time in years.

"These tariffs are an affront to the long standing security partnership between Canada and the United States, and in particular, an affront to the thousands of Canadians who have fought and died alongside their American brothers in arms", he said, noting the U.S. national security justification for its measures.

Before the exemption was granted in March, U.S. President Donald Trump said that Mexico and Canada could be spared from the measure "if a new and fair NAFTA agreement is signed".

Commerce Secretary Wilbur Ross said the president acted on national security grounds, seeing a rising tide of imports as a threat to the domestic metals industry.

French President Emmanuel Macron during a speech said on Wednesday, "Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade".

Trump announced worldwide steel and aluminum tariffs in March but granted exemptions to some major trading partners. "Canada is a secure supplier of aluminum and steel to the USA defense industry, putting aluminum in American planes and steel in American tanks". "Most of the time as I travel around I get confirmation these are high quality high value steel imports", he said, adding that in many cases these were products that couldn't be obtained in the U.S.

"It's entirely up to U.S authorities whether they want to enter into a trade conflict with their biggest partner, Europe", France's Finance Minister Bruno Le Maire said after meeting with Ross on Thursday.

Fellow Republican Senator Ben Sasse, an occasional Trump critic, offered a less delicate assessment.

"When it comes to unfairly traded steel and aluminum, Mexico, Canada, and Europe are not the problem - China is", said Kevin Brady, chairman of the House Ways and Means Committee.

"The steel and aluminum tariffs will have a poisonous effect on the NAFTA negotiations", Alden said. Obviously, we still hope the United States will think again about this.

As a result the company said it will be asking for an exemption from the tariffs.

Ross said the US would consider the effect of those measures. "The fact that we took a tariff action does not mean that we can not have trade negotiations".

The worldwide response to the action was swift.

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