Donald Trump warns of more tariffs as EU and Canada respond to current ones

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United States President Donald Trump has threatened to escalate a global trade war with further tariffs on European Union (EU) goods, as major US trading partners said they would retaliate for trade barriers already erected by Trump.

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 on Thursday (AEDT).

Trump’s hyper-focus on tariffs has rattled investor, consumer and business confidence and raised recession fears.

He also has strained 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 US, announced 25 per cent retaliatory tariffs on those metals along with computers, sports equipment and other products worth nearly C$30 billion ($33 billion) in total.

Canada has already imposed tariffs worth a similar amount on US goods in response to broader tariffs by Trump.

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

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

US commerce secretary Howard Lutnick said Trump would impose trade protections on copper as well.

Trump hits back

The 27 EU countries are less exposed, as only a “small fraction” of targeted products are exported to the US according to Germany’s Kiel Institute.

The EU’s counter-measures would target up to $45 billion worth of US goods like dental floss, diamonds, bathrobes and bourbon — which likewise account for a small portion of the giant EU-US commercial relationship. Still, the liquor industry warned it would be “devastating” on its sector.

Ursula von der Leyen, president of the European Commission, said the bloc will resume talks with US officials.

“It is not in our common interest to burden our economies with such tariffs,” she said.

At the White House, Trump said he would “of course” respond with further tariffs if the EU followed through on its plan. With Irish Prime Minister Micheál Martin at his side, Trump criticised the EU member country for luring away US pharmaceutical companies.

In remarks delivered later at a White House ceremony, Martin highlighted the history of free trade between the two nations.

“Let us continue to build on that foundation,” he said, with Trump looking on. “Let us continue to work together to make sure that we maintain that mutually beneficial, two-way economic relationship that has allowed innovation and creativity and prosperity to thrive.”

China’s foreign ministry said it would safeguard its interests, while Japan’s chief cabinet secretary Yoshimasa Hayashi said the move could have a major impact on US-Japan economic ties.

Close US allies United Kingdom and Australia criticised the blanket tariffs, with Prime Minister Anthony Albanese saying the move was “unjustified” and “against the spirit of our two nations’ enduring friendship”.

“Friends need to act in a way that reinforces to our respective populations the fact that we are friends — this is not a friendly act,” he said on Wednesday.

However, both countries ruled out immediate tit-for-tat duties.

The other countries most affected by the tariffs are Brazil, Mexico and South Korea, which all enjoyed some level of exemptions or quotas.