Business reporter, BBC News
Getty ImagesUS President Donald Trump has pledged to impose more tariffs after his latest move to introduce import taxes on steel and aluminium entering the US prompted retaliation from the European Union (EU) and Canada.
Trump said “of course” he would respond to the countermeasures, repeating his warning to reveal “reciprocal” tariffs next month on countries around the world.
“Whatever they charge us with, we’re charging them,” he said.
The threat marked a further escalation of a trade war which has rattled financial markets amid concerns over the impact on the economies and consumers in many countries around the world, including the US.
On Wednesday, Trump moved forward with a plan to widen US tariffs on steel and aluminium, imposing a blanket duty of 25% and ending exemptions that the US had previously granted for shipments from some countries.
That followed an order earlier this month that raised levies on Chinese imports into the US to at least 20%.
Trump has also threatened tariffs – which are taxes applied to goods as they enter a country – on a range of more specific items, including copper, lumber and cars.
Leaders in Canada and Europe called the new metals taxes unjustified and struck back with their own tariffs on a range of US products.
Other countries that are key US suppliers of metals, including the UK, Australia, Mexico and Brazil, held off on any immediate retaliation.
“Like everybody else, I’m disappointed to see global tariffs in relation to steel and aluminium but we will take a pragmatic approach,” said UK Prime Minister Sir Keir Starmer.
“We are…negotiating a deal which covers and includes tariffs if we succeed. But we will keep all options on the table.”
‘Bad for business, worse for consumers’
Canada said from Thursday it would start charging a 25% tax on nearly C$30bn ($20bn; £16bn) worth of US products, including steel, computers and sports equipment.
Prime Minister-designate Mark Carney said he was ready to negotiate a renewed trade deal with Trump, as long as there is “respect for Canadian sovereignty”.
The EU said it would raise its levies on up to €26bn ($28bn; £22bn) worth of US goods, including boats, bourbon and motorbikes, from 1 April.
EU President Ursula von der Leyen said the response was intended to be “strong but proportionate” and added that the EU stood “ready to engage in a meaningful dialogue”.
“Tariffs are taxes. They are bad for business and worse for consumers,” she said, warning the economic disruption put jobs at stake and would send prices higher.
“Nobody needs that – on both sides, neither in the European Union nor in the United States.”
Trump had said he wants to boost US steel and aluminium production in the longer run, but critics say in the immediate term the taxes on imports of the metals will raise prices for US consumers and dent economic growth.
Major packaged food makers including Quaker Oats and Folgers coffee asked Trump for targeted exemptions from tariffs on imports such as cocoa and fruit, according to a letter seen by Reuters.
PepsiCo, Conagra and J M Smucker, also requested the president exempt ingredients not available from US sources in the letter, which was sent by the trade group the Consumer Brands Association.
Coffee, oats, cocoa, spices, tropical fruit and tin mill steel, used for some food and household goods, are among the imports listed as unavailable domestically, Reuters reported.
The import taxes are also expected to reduce demand for steel and aluminium that is not made in the US – a blow to makers of the metals elsewhere.
The EU estimated that the latest US tariffs affect about 5% of its total exports to the US, while the US is the destination for roughly 90% of Canada’s steel and aluminium exports.
Shares in the US were mixed on Wednesday, after two days of sharp decline. The Dow closed down 0.2%, while the S&P 500 ended nearly 0.5% higher and the Nasdaq jumped 1.2%.
In an appearance at the White House with the Irish prime minister, Taoiseach Micheál Martin, Trump said he did not plan to back down from his trade fight, saying he was “not happy” with EU trade policies.
He cited concerns about legal penalties it has imposed on Apple and rules he claimed put US farm products and cars at a disadvantage.
“They’re doing what they should be doing perhaps for the European Union but it does create ill will,” he said.
Repeating his threat to hit European cars with tariffs, he added later: “We’re going to win that financial battle.”
