US triggers trade war with longtime allies after tariffs on steel, aluminum imports

WASHINGTON, June 1 (APP):Prospects of an all-out trade war is looming large after longtime allies announced retaliatory measures to the decision by President Trump to impose tariff on steel and aluminum imports and Canadian Prime Minister cancelled a planned visit to Washington to finalize a trade deal.
US Commerce Secretary on Thursday announced to end a three-month exemptions granted to the European Union, Canada and Mexico, which will now face 25 percent and 10 import duties on steel and aluminum respectively.
The EU, Canada and Mexico are the largest trade partners of the United States and the retaliatory measures are set to impact American consumers. Nearly 50 percent of the US imports of steel and aluminum came from these three countries last year.
While, the President downplayed prospects of a trade wars which, he said, were easy to win, measures announced by the allies indicated a tough contest in coming months. The decision by President Trump drew criticism of lawmakers from his own Republican Party and business groups.
Reacting immediately to the suspension of exemptions, Canada, Mexico and the EU announced a series of retaliatory measures. Canada said it would impose upward of $12.4 billion in tariffs on US steel, aluminum and other American products, effective July 1. The new duties, which matched the US tariffs will remain in place until the US withdrew its decision.
The President of the European Commission, Jean-Claude Juncker, said that the US had left no choice for them but to proceed with a WTO dispute settlement case and imposition of additional tariffs on a number of US imports. He described the US decision as pure protectionism.
The EU tariffs could target US goods worth $3.3 billion that could include items such as Kentucky bourbon, jeans and Harley-Davidson motorcycles.
Mexico said it would slap duties on a wide range of American goods such as hot and cold foil, lamps, port, sausages, apples, grapes, blueberries and various brands of cheese.
A trade war will be bad for consumers on both sides of the Atlantic, said Liam Fox, the United Kingdom’s secretary of state for international trade. The UK supplies steel for the U.S. defense industry.
The US relations with neighboring Canada showed signs of even more deterioration after Canadian Prime Minister Justin Trudeau announced to cancel a plan visit to Washington to finalize the North American Free Trade Agreement (NAFTA) which, President Trump says is not an unfair deal.
The announcement came after Vice President Mike Pence, during a telephonic conversation with the Canadian Premier demanded that any agreement expire after five years. In a presidential statement that followed soon, President Trump said that the US would either accept a fair deal or no deal.