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U.S. partners fire trade salvoes in retaliation for U.S. tariff

Staff Writer |
The EU, Mexico and Canada blasted back quickly with retaliatory trade measures after the U.S. followed through on threatened tariffs taking effect Friday on imported steel and aluminium.

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European Commission President Jean-Claude Juncker called the tariffs "protectionism, pure and simple," Canada called them "absurd" and German government spokesman Steffen Seibert said they risked provoking "cycles of escalation that will be detrimental to all".

The EU, Mexico and Canada had initially received exemptions when US President Donald Trump declared global tariffs on imported metals, which started in March. Those temporary waivers were extended through May while the White House sought negotiated concessions.

US Commerce Secretary Wilbur Ross announced Thursday that Trump "has decided in the case of Canada, Mexico and the EU not to extend the exemptions, and therefore they will be placed under the 25% tariff on steel and 10% on aluminium effective at midnight tonight."

Ross claimed that Trump has far-reaching, "unilateral" power to impose and adjust tariffs and quotas by invoking a rarely used 1962 law authorizing presidential action against imports that undermine national security.

The EU has warned since March of potential retaliation if Washington imposes permanent tariffs. Brussels submitted a list to the World Trade Organization of US products that could be slapped with punitive import duties.

"What they can do, we are able to do exactly the same," Juncker said Thursday.

The EU list covers agricultural products including corn, rice, peanut butter and orange juice. Whiskey, tobacco and denim jeans would also be subject to higher tariffs, as well as various steel products, motorcycles and boats.

The German and French governments issued a joint statement saying the countries supported countermeasures proposed by the EU and would work closely to counter the U.S. tariffs.

Ross said the metal tariffs were allowed to kick in against the U.S. neighbours after the NAFTA talks were "taking longer than we had hoped".

In Mexico City, the Economy Ministry vowed countermeasures on U.S. products including steel sheets, lamps, pork products, sausages, apples, grapes and cheeses, up to a sum equivalent to Mexican losses from the US tariffs on metals.

Deputy Foreign Trade Minister Juan Carlos Baker said that the national security reasoning behind the U.S. tariffs was "neither adequate nor justified.

"Mexico strongly rejects any unilateral and protectionist measure that distorts trade in North America," he tweeted.

Canada retaliated with duties on a broad range of products worth up to CAD16.6 billion, about $12.8 billion, Foreign Affairs Minister Chrystia Freeland said.

The countermeasures, set to take effect July 1, target everything from US steel and aluminium to maple syrup and ballpoint pens in what Freeland said were "the strongest trade action Canada has taken in the post-war era".

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