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EU and Mexico to hit back against Trump's steel tariffs – business live Trade tariffs: Canada and Mexico agree joint retaliation to Trump – live
(35 minutes later)
Canada’s prime minister Trudeau and Mexico’s president Enrique Peña Nieto have reportedly spoken and agreed to co-ordinate retaliation efforts...
A formal complaint by the EU at the WTO in Geneva is expected tomorrow, Friday.
In joint statement the French minister and German finance minister, Bruno la Marie and Peter Altamira, said they regretted the “unilateral decision” taken by the White House and backed the European Commission’s retaliatory response.
Canadian prime minister Justin Trudeau is expected to speak at 1.30pm ET. In the meantime, we have Kathleen Wynne, the premier of Ontario, who has called Trump a “bully”, describing him as a “man who simply does not seem to get that his bluster and his bullying are costing real people real jobs”.
Donald Trump is a bully. The only way to deal with a bully is stand up and push back. And that’s exactly what we need to do. Ontario is urging a swift and sharp response. We need to hit Trump where it hurts – in his wallet.
The conservative business network backed by the wealthy industrialist brothers Charles and David Koch has also come out in opposition to the tariffs. Freedom Partners Chamber of Commerce and Americans for Prosperity warned there would be a tax increase on all Americans and would undermine the nation’s economy and low unemployment rates.The conservative business network backed by the wealthy industrialist brothers Charles and David Koch has also come out in opposition to the tariffs. Freedom Partners Chamber of Commerce and Americans for Prosperity warned there would be a tax increase on all Americans and would undermine the nation’s economy and low unemployment rates.
Now for the reaction from Washington…Now for the reaction from Washington…
Kevin Brady, the Texas Republican chairman of the House Ways and Means Committee, has said the Trump administration is “hitting the wrong target” and officials will need to provide answers to Congress about the damage to US businesses.Kevin Brady, the Texas Republican chairman of the House Ways and Means Committee, has said the Trump administration is “hitting the wrong target” and officials will need to provide answers to Congress about the damage to US businesses.
“When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem – China is. These tariffs are hitting the wrong target.”“When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem – China is. These tariffs are hitting the wrong target.”
Brady urged the administration to exempt allies from the new import tariffs. And he warned that administration officials “will need to come to Capitol Hill to provide answers about the indiscriminate harm these tariffs are causing our local businesses”.Brady urged the administration to exempt allies from the new import tariffs. And he warned that administration officials “will need to come to Capitol Hill to provide answers about the indiscriminate harm these tariffs are causing our local businesses”.
Continuing the denunciations of the US decision, Germany’s foreign minister Heiko Maas says the European Union “is ready to react accordingly with counter measure”.Continuing the denunciations of the US decision, Germany’s foreign minister Heiko Maas says the European Union “is ready to react accordingly with counter measure”.
As Europe prepares to hit back with tariffs on a list of US exports worth €6.4 billion ($7.5 billion), Mexico’s economy ministry has said it will target several US goods in response, including some steel and pipe products, lamps, berries, grapes, apples, cold cuts, pork chops and various cheese products “up to an amount comparable to the level of damage” linked to the US tariffs. Canada is also expected to impose retaliatory measures, details of which are expected soon.As Europe prepares to hit back with tariffs on a list of US exports worth €6.4 billion ($7.5 billion), Mexico’s economy ministry has said it will target several US goods in response, including some steel and pipe products, lamps, berries, grapes, apples, cold cuts, pork chops and various cheese products “up to an amount comparable to the level of damage” linked to the US tariffs. Canada is also expected to impose retaliatory measures, details of which are expected soon.
Adam Marshall, Director General of the British Chambers of Commerce (BCC), called the US move “hugely disappointing” and warned that the tariffs “will hurt companies and communities in many areas of the UK, as well as their customers in the US”.Adam Marshall, Director General of the British Chambers of Commerce (BCC), called the US move “hugely disappointing” and warned that the tariffs “will hurt companies and communities in many areas of the UK, as well as their customers in the US”.
“The UK government must reach out to and support the many supply chain businesses that face becoming the ‘collateral damage’ of the Trump administration’s protectionist push. British ministers must also work hand in hand with the EU to avoid any further escalation, and to find a long-term solution.”“The UK government must reach out to and support the many supply chain businesses that face becoming the ‘collateral damage’ of the Trump administration’s protectionist push. British ministers must also work hand in hand with the EU to avoid any further escalation, and to find a long-term solution.”
But he also warned that the US decision to impose punitive tariffs should serve as a reminder that self-interest looms large in trade negotiations.But he also warned that the US decision to impose punitive tariffs should serve as a reminder that self-interest looms large in trade negotiations.
“Ministers should reflect on this carefully before they pursue any future trade deal between the UK and the USA.”“Ministers should reflect on this carefully before they pursue any future trade deal between the UK and the USA.”
More from Boffey:More from Boffey:
Manfred Weber, the leader of the European People’s Party, the largest group in the European Parliament, and a key ally of the German chancellor, warned that treating the EU as the “enemy” would lead to US consumers hurting too.Manfred Weber, the leader of the European People’s Party, the largest group in the European Parliament, and a key ally of the German chancellor, warned that treating the EU as the “enemy” would lead to US consumers hurting too.
He said: “Europe does not want a trade conflict. We believe in a fair trade regime from which everybody benefits. We have tried everything to make dialogue and mutual understanding prevail. If President Trump decides to treat Europe as an enemy, we will have no choice but to defend European industry, European jobs, European interests.”He said: “Europe does not want a trade conflict. We believe in a fair trade regime from which everybody benefits. We have tried everything to make dialogue and mutual understanding prevail. If President Trump decides to treat Europe as an enemy, we will have no choice but to defend European industry, European jobs, European interests.”
But he warned his party would not accept “this highly regrettable decision without reacting. This will have consequences for the American people too. In a trade conflict there are only losers.”But he warned his party would not accept “this highly regrettable decision without reacting. This will have consequences for the American people too. In a trade conflict there are only losers.”
The situation, he added, “has to be a wake-up call for us Europeans.”The situation, he added, “has to be a wake-up call for us Europeans.”
“With the US closing in on itself, we should be bridge-builders and reliable partners for the rest of the world. Europe now has to act with a clear message and remain united, calm and proportionate.”“With the US closing in on itself, we should be bridge-builders and reliable partners for the rest of the world. Europe now has to act with a clear message and remain united, calm and proportionate.”
Gareth Stace, director of UK Steel, called the US decision “a bad day for the steel sector, for international relations and for free trade.”Gareth Stace, director of UK Steel, called the US decision “a bad day for the steel sector, for international relations and for free trade.”
He said it is vital that the EU and US continue discussions to find a way through the current impasse and reach an agreement that works for all parties.He said it is vital that the EU and US continue discussions to find a way through the current impasse and reach an agreement that works for all parties.
But he called on the EU to forge ahead with safeguard action.But he called on the EU to forge ahead with safeguard action.
And from the Guardian’s political correspondent Jessica Elgot:And from the Guardian’s political correspondent Jessica Elgot:
A UK government spokesman said they were “deeply disappointed” by the outcome.A UK government spokesman said they were “deeply disappointed” by the outcome.
“The UK and other European Union countries are close allies of the US and should be permanently and fully exempted from the American measures on steel and aluminium,” the spokesman said. “We have made clear to the US government at the highest levels the importance of UK steel and aluminium to its businesses and defence projects. We will continue to work closely with the EU and US Administration to achieve a permanent exemption, and to ensure that UK workers are protected and safeguarded.”“The UK and other European Union countries are close allies of the US and should be permanently and fully exempted from the American measures on steel and aluminium,” the spokesman said. “We have made clear to the US government at the highest levels the importance of UK steel and aluminium to its businesses and defence projects. We will continue to work closely with the EU and US Administration to achieve a permanent exemption, and to ensure that UK workers are protected and safeguarded.”
May will raise the tariffs with Trump directly when the pair meet at the G7 in Canada next week, where the issue is likely to figure prominently. May has personally lobbied the US president repeatedly in recent weeks and months.May will raise the tariffs with Trump directly when the pair meet at the G7 in Canada next week, where the issue is likely to figure prominently. May has personally lobbied the US president repeatedly in recent weeks and months.
The Guardian’s Daniel Boffey from Brussels:The Guardian’s Daniel Boffey from Brussels:
Brussels has been preparing a retaliatory hit on an array of US goods, both industrial and agricultural, ranging from Harley Davidson motorbikes to blue jeans and American bourbon. Ambassadors from the 28 member states were in immediate communication with the European Commission following the announcement from the Trump administration. Speaking at a conference in Brussels, Juncker said the EU would launch retaliatory action “in the coming hours”. “This is a bad day for world trade,” Juncker. “It’s totally unacceptable that a country is imposing unilateral measures when it comes to world trade. What they can do, we are able to do.”Brussels has been preparing a retaliatory hit on an array of US goods, both industrial and agricultural, ranging from Harley Davidson motorbikes to blue jeans and American bourbon. Ambassadors from the 28 member states were in immediate communication with the European Commission following the announcement from the Trump administration. Speaking at a conference in Brussels, Juncker said the EU would launch retaliatory action “in the coming hours”. “This is a bad day for world trade,” Juncker. “It’s totally unacceptable that a country is imposing unilateral measures when it comes to world trade. What they can do, we are able to do.”
Susan Danger, chief executive of the American Chamber of Commerce to the EU (AmCham EU), said the White House did not have any justification for imposing the tariffs.
“American companies in Europe oppose the US government’s decision to impose tariffs on EU imports of steel and aluminium. We urge the US government to revisit its plans and the EU to take a balanced approach in responding to these measures. We are very concerned by the damage a tit-for-tat dispute would cause to the transatlantic economy and its impact on jobs, investment and security across the Atlantic.”
Mexico’s Undersecretary of Foreign Trade, Juan Carlos Baker, tweeted:
Mexico decisively rejects any unilateral, protectionist measure that distorts trade.
Ramón Beltrán, the president of Mexico’s National Chamber of the Aluminium Industry, told ‘Aristegui En Vivo’: “Nobody will win [the trade war that is beginning]. The US will lose.”“Frankly, we do not like this at all,” Beltrán added.Beltrán claimed the US move was designed to pressure Mexico over NAFTA negotiations. “[But] we shouldn’t contaminate one thing with the other.”
Mexico’s Secretariat of Economy said it “profoundly regretted” the US move and announced it would hit back with tariffs on products including including grapes, apples, pork legs and shoulders, blueberries, some cheeses as well as flat steel. “Mexico has repeatedly made clear that these kinds of measures based on national security are neither appropriate nor justified,” the secretariat said in a statement.
The former Belgian prime minister, and leader of the liberals in the European Parliament, Guy Verhofstadt, said: “Unfortunately, these steps weaken the transatlantic alliance. Instead of imposing punitive tariffs on their closest allies, the US and EU should work together to tackle China’s unfair trading practices.”
He continued: “As with Brexit, what is most important now is unity within the EU. If we are united, we will have a strong position to face this wave of protectionism, which will benefit no one. The EU has proven to be a strong and reliable global trading partner. In recent months, the EU secured major free trade deals with partners like Canada, Japan and Mexico. This shows what we can achieve when Europe speaks with one voice. We need to continue in this spirit and work with partners around the globe to preserve the rules-based multilateral trading system.”
In his statement, EU commission president Juncker said:
“I am concerned by this decision. The EU believes these unilateral US tariffs are unjustified and at odds with World Trade Organisation rules. This is protectionism, pure and simple. Over the past months we have continuously engaged with the US at all possible levels to jointly address the problem of overcapacity in the steel sector. Overcapacity remains at the heart of the problem and the EU is not the source of but on the contrary equally hurt by it.
US equities fell on the news, with the Dow Jones industrial average dropping 250 points. Mexican stocks also fell, while the Mexican peso and Canadian dollar hit their lows of the day against the dollar after news of US tariffs broke.
Author and historian Simon Schama has also weighed in, posting on Twitter that “Europe now has to show some real spine or else it will just become Trump’s doormat”.
After the sabotage of the Iran deal; Europe now has to show some real spine or else it will just become Trump's doormat https://t.co/KX1j31hY5m
The president of the European commission, Jean-Claude Juncker, has issued a statement and commented on Twitter: “It’s a bad day for world trade. US leaves us no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of US imports. We will defend the EU’s interests, in full compliance with international trade law.”
It’s a bad day for world trade. US leaves us no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of US imports. We will defend the EU’s interests, in full compliance with international trade law. https://t.co/J3wPW5Ew7K pic.twitter.com/aDlOWcSgRv
Markets have edged into negative territory despite earlier rises on hopes of a resolution to the Italian political crisis.
The moves came as the US imposed steel and aluminium tariffs on the EU, Mexico and Canada. Investors are also fretting about other geopolitical problems, including Friday’s vote of no confidence in Spain, the continuing concerns about North Korea and Iran, the prospect of a trade war between the US and China.
Italy’s FTSE MIB is currently down 0.13%, while Spain’s Ibex is 0.2% lower and Germany’s Dax is down 0.75%. France’s Cac has managed to edge up 0.03% while the FTSE 100 is 0.18% higher. On Wall Street, the Dow Jones Industrial Average is down 145 points or 0.62%.
On the economic front, eurozone inflation came in higher than forecast in May.
UK consumer credit rebounded in April, as the City regulator ordered a clampdown on high cost credit.
In the US, consumer spending and weekly jobless claims both came in better than expected.
Finally, the Bank of England has appointed academic Jonathan Haskel to its rate setting monetary policy committee, the only man on a shortlist of five candidates.