United States stocks tumble as Trump starts trade brawl against the world

President Donald Trump speaks during a Memorial Day

President Donald Trump speaks during a Memorial Day

"He has decided in the case of Canada, Mexico and the European Union not to extend the exemptions and therefore they will be placed under the 25% tariff on steel and the 10% tariff on aluminum effective midnight tonight", Ross told reporters in a morning conference call.

While the imposition of 25 percent duty on import of steel and 15 percent on aluminum was meant to target the Chinese industry, the new tariff policy looks like it has hit close friends and allies of the US.

President Donald Trump's administration imposed tariffs on steel and aluminum imports from the European Union, Canada, and Mexico Thursday, a move that could provoke retaliatory tariffs and inflame trans-Atlantic trade tensions. Shares of industrial heavyweights Boeing (BA.N) and Caterpillar (CAT.N) were each down about 1 percent, while shares of US steel and aluminium companies rallied.

The U.S. administration launched a national security investigation last week into vehicle and truck imports, using the same 1962 law that he has applied to curb incoming steel and aluminium.

But German politicians and industry groups have said they are concerned that tit-for-tat measures could end in damaging tariffs on German automobiles, an outcome that Trump has repeatedly threatened.

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The EU said on Thursday it will impose retaliatory duties, a measure the bloc earlier indicated would target US$3.3 billion in American products from Harley-Davidson Inc. motorcycles to Levi Strauss & Co.'s jeans as well as bourbon whiskey.

"This is another negotiation tactic on the U.S. side because there are other negotiations going on". He reiterated the US concerns over the indirect flow of cheap Chinese steel into the USA through other countries. Neither Canada nor Mexico seems close to accepting a key US demand on imposing a "sunset clause", and the requirement of a minimal level of North American content for automobiles to qualify for preferential tariffs.

"The EU believes these unilateral USA tariffs are unjustified and at odds with World Trade Organization rules".

French Finance Minister Bruno Le Maire termed the U.S. tariffs as "unjustified unjustifiable and dangerous". The European Commission said that specific countermeasures would come Friday. They are the two-biggest suppliers of foreign vehicles to the U.S.

"We are on the losing side of nearly all trade deals".

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But Ross said Thursday that those talks "are taking longer than we hoped".

US Treasury Secretary Steven Mnuchin is due to hold meetings with his European counterparts to discuss President Donald Trump's confrontational trade agenda, officials said. Likely targets are thought to be US exports of jeans, motorcycles and bourbon.

"Today is a bad day for world trade", she said.

German Chancellor Angela Merkel said the European Union would give a "smart, determined and jointly agreed" response to the new tariffs that she said would break WTO rules.

Meanwhile, the president is reportedly mulling a plan to open a new front in his trade war by establishing a "total ban on the imports of German luxury cars".

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