On May 29th, days after tariffs on imports from China were supposedly put on hold, official word came that tariffs on $50bn of Chinese imports would be imposed "shortly" after June 15th.
In response, the European Commission confirmed it would be triggering a dispute settlement case at the World Trade Organisation and will impose "rebalancing measures and take any necessary steps to protect the EU market from trade diversion caused by these United States restrictions", according to a statement on its website on Thursday (31 May).
"Today is a bad day for world trade", said Cecilia Malmström, the European trade commissioner. Accordingly, despite the historical precedent for unilateral, protectionist trade measures to result in a weaker US Dollar, market participants are seemingly unmoved by the latest developments.
The administration has argued that foreign production of steel and aluminum has driven down prices and hurt USA producers, creating what the Commerce Department has called a national security threat. European Union exports potentially subject to USA duties are worth 6.4 billion euros ($7.5 billion). The bloc also plans to proceed with a case at the World Trade Organization against the USA import restrictions.
About half of Canada's steel and 80 per cent of aluminum is exported to the U.S. Growing trade tensions have clouded a benign outlook for the global economy, which is on track to grow at its fastest pace since 2011 this year and next, according to the International Monetary Fund.
The tariffs would include taxes of 25% and 10% on steel and aluminum imported into the U.S., and that is sending United States steel manufacturers higher.
"We continue to hope the exemption will be extended while Nafta talks are ongoing and ultimately there is a positive resolution that doesn't involve a tariff or a quota", said Galimberti of the steel producers' association. "We are awaiting their reaction". "This month he called it a "horrible" disaster for the USA economy".
The US granted temporary exemptions to the EU, Canada and Mexico amid negotiations over limits. There's potential "flexibility" in the future because the president has the power to increase or cut tariffs, remove them, or enact quotas, he said.
Mr Ross said talks had not made enough progress to warrant a further reprieve either for Europe or for Canada and Mexico, which are in negotiations with the United States over North America's free trade agreement.
Mexico said it would penalize US imports including pork bellies, apples, grapes, cheeses and flat steel.
Guajardo said retaliation was aimed at products chosen to hit districts with important lawmakers who had been warning Trump not to mess with Mexico.
Jean-Claude Juncker, president of the European Commission, said the European Union also will apply news tariffs on American goods, with the trading bloc signaling it would target products made in states represented by key Republican leaders.
The initial tariffs were announced in March by the US President Donald Trump, who claimed that the US had been treated unfairly by its trade partners for years.
United Kingdom exports of aluminium to the USA are tiny, but in March the UK's Aluminium Federation said it feared the 10% tariffs.
The action was mainly targeted at China over accusations of flooding the global market with cut-rate metals and dragging down prices. So naturally, on Thursday the Trump administration took a dramatic step to disrupt USA exports and pour ice water on the economy.
The NAFTA talks were one factor in the administration's decision to grant exemptions to Canada and Mexico from the steel and aluminum tariffs.