Global Trade War Escalates with US-EU Tariff Threats

WASHINGTON – Donald Trump threatened on Wednesday to escalate a global trade war with further tariffs on European Union goods, as major US trading partners said they would retaliate for trade barriers already erected by the US president.

Just hours after Trump’s 25 per cent duties on all US steel and aluminum imports took effect, Trump said he would impose additional penalties if the EU follows through with its plan to enact counter tariffs on some US goods next month. “Whatever they charge us, we’re charging them,” Trump told reporters at the White House.

Trump’s hyper-focus on tariffs has rattled investor, consumer and business confidence and raised recession fears. He has also frayed relations with Canada, a close ally and major trading partner, by repeatedly threatening to annex the neighbouring country.

Canada, the biggest foreign supplier of steel and aluminum to the United States, announced 25 per cent retaliatory tariffs on those metals along with computers, sports equipment and other products worth $20 billion in total. Canada has already imposed tariffs worth a similar amount on US goods in response to broader tariffs by Trump.

“We will not stand idly by while our iconic steel and aluminum industries are being unfairly targeted,” Canada’s Finance Minister Dominic LeBlanc said.

Canada’s central bank also cut interest rates to prepare the country’s economy for disruption.

Trump’s action to bulk up protections for American steel and aluminum producers restores effective tariffs of 25 per cent on all imports of the metals and extends the duties to hundreds of downstream products, from nuts and bolts to bulldozer blades and soda cans. (Reuters)