US trading partners fire back in escalating trade war

Major U.S. trading partners waste little time Thursday striking back against a White House move to slap steel and aluminum tariffs on Candia Mexico and the European Union.

"This is protectionism, pure and simple," said European Commission's president, Jean-Claude Juncker, as European trade officials issued a list of hundreds of U.S. products, everything from peanut butter to motorcycles, which would now be subject to tariffs by European consumers.

Mexico, the third largest U.S. trade partner, said it would penalize U.S. imports including pork bellies, apples, grapes, cheeses and flat steel.

Canada, the second largest trade partner, behind China, did not officially respond to the White House Thursday. But in March, during talks over the U.S. insistence on renegotiating the 24-year old North American Free Trade Agreement, Canadian Foreign Minister Chrystia Freeland said Ottawa would impose countermeasures if the U.S. went ahead with its tariff threats.

"Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers," she said in a statement, calling any trade restrictions "absolutely unacceptable."

On Thursday, Commerce Secretary Wilbur Ross said the U.S. tariffs would amount to 25 percent on steel and 10 percent on aluminum, and go into effect on Friday. The administration was following through on penalties after earlier granting exemptions to buy time for negotiations. President Donald Trump initially announced the tariffs in March, citing national security concerns, but promised to delay them as negotiations proceeded.

The list of U.S. exports targeted by the European Union included jewelry products (worth $1.46 billion a year), Bourbon whiskey ($737 million) automotive glass worth ($686 million), telecom equipment ($506 million) and a wide range of personal care products ($470 million), according to S&P Global Market Intelligence.

Also on the list: American-made blue jeans, worth about $76 million in year in European exports.

Mexico's economy ministry said its countermeasures will be remain in effect until the U.S. government drops the steel and aluminum tariffs

"Mexico reiterates its openness to constructive dialog with the United States, its support for the international commerce system and its rejection of unilateral protectionist measures," it said.

Mexico buys more steel and aluminum from the United States than it sells. It is the top buyer of U.S. aluminum and the second buyer of U.S. steel, the economy ministry said. Its countermeasures will hit U.S. hot and cold rolled steel, plated steel and tubes, the ministry said.

The latest salvo in the Trump administration's trade war comes as the United States, Canada and Mexico have been renegotiating NAFTA, which governs trade between the three countries.

The trade actions have opened the U.S. to criticism that it's burning bridges at a time when Trump is seeking to rid North Korea of nuclear weapons and help stabilize the Middle East.

"We are alienating all of our friends and partners at a time when we could really use their support," said Wendy Cutler, a former U.S. trade negotiator who is now vice president at the Asia Society Policy Institute.

Ross told reporters that talks with Canada and Mexico over revising the North American Free Trade Agreement were "taking longer than we had hoped." Talks with Europe had "made some progress" but not enough for additional exemptions, he said in a conference call from Paris.

"We continue to be quite willing and indeed eager to have further discussions," Ross said. He said he planned to travel to China on Friday for trade talks between the world's two biggest economies.

European officials had braced for the tariffs and the EU has threatened to retaliate against U.S. orange juice, peanut butter and other goods in return. In terms of the NAFTA talks, the tariffs could hinder the negotiations among the North American neighbors.

On NAFTA, Ross said there was "no longer a very precise date when they may be concluded and therefore (Canada and Mexico) were added into the list of those who will bear tariffs."

Brazil, Argentina and Australia have agreed to limit steel shipments to the U.S. in exchange for being spared the tariffs, the Commerce Department said. Tariffs will remain on imports from Japan.

Fears of a global trade war are already weighing on investor confidence and could hinder the global economic upturn. European officials argue that tit-for-tat tariffs will hurt growth on both sides of the Atlantic and Canada said before the announcement that it would respond in kind.