US Tariffs: Europe Looks To WTO, Canada Retaliates

The EU has vowed to unite against the US decision to impose heavy tariffs on steel and aluminium imports from key allies, as Canada immediately announced billions of dollars worth of retaliatory duties on American goods.

European powers had for months hoped to lure US President Donald Trump away from his tariff threat, but now face the reality of a looming trade war after US Commerce Secretary Wilbur Ross announced the tariffs against the EU, Canada and Mexico.

The move weighed heavily on US stocks, with the Dow Jones closing 1 percent lower at 24,416.

The European Commission called it "protectionism, pure and simple", saying it would take the matter to the WTO. German Chancellor Angela Merkel slammed the shock duties as illegal and said they risked sparking a disastrous spiral of retaliatory measures.

She said Europe will respond in a "firm and united" way to the tariffs, with the pressure higher than ever to mend differences within the EU on how to tackle the Trump threat.

France's foreign ministry called the levies "unjustified and unjustifiable".

Canada swiftly hit back, announcing retaliatory duties on American goods worth about US$13 billion. Prime Minister Justin Trudeau said the US tariffs announced earlier were "totally unacceptable."

"These tariffs are an affront to the long standing security partnership between Canada and the United States, and in particular, an affront to the thousands of Canadians who have fought and died alongside their American brothers in arms," he said, noting the US national security justification for its measures.

The Canadian tariffs, which Foreign Minister Chrystia Freeland said are proportional to the US duties, will be applied to US steel and aluminum as well as consumer products.

At the same time, Ottawa will also challenge the US measures under the North American Free Trade Agreement and at the World Trade Organisation. (AFP)