Key US allies in Europe and North America slapped back after the Trump administration imposed steel and aluminum tariffs on major trading partners who had sought wavers.
The US action and immediate counter-punch sent markets plunging, with the Dow Jones Industrial Average down more than 200 points. By the close of trading, the Dow had dropped 251 points, or about 1 per cent.
Amid the tit-for-tat among commodities and products, Canadian Prime Minister unloaded on the new tariffs and invoked the conflicts where North Americans shed blood together.
'These tariffs are an affront to the long-standing security partnership between Canada and the United States, and in particular, to the thousands of Canadians who have fought and died alongside American comrades-in-arms,' he said.
"Let me be clear: These tariffs are totally unacceptable," Trudeau said at an afternoon press conference.
"Canadians have served alongside Americans in two world wars and in Korea. From the beaches of Normandy to the mountains of Afghanistan, we have fought and died together," he said.
"We defended the United States after September 11th, just as the Americans defended us in the past," Trudeau said, alternating between French and English.
He also tried to separate his criticism of the Trump policy from Americans generally.
"This is not about the American people. We have to believe that at some point their common sense will prevail," he said, The Hill reported.
Soon after Commerce Department Secretary Wilbur Ross announced the U.S. tariffs would go ahead, Mexico announced it would hit it's northern neighbor in the stomach: saying it would put tariffs on U.S. steel, pork chops, cold cuts, grapes, apples and berries.
The European Union announced a plan to seek redress at the World Trade Organization, while retaliating against US products including peanut butter.
Canada is imposing its own barriers on US-made steel and aluminum.
The combined actions gave the impression of an escalating trade war – exactly the posture a top European official cautioned against when he said trade wasn't a fight at the "OK Corral."
'This is protectionism, pure and simple,' said European Commission President Jean-Claude Juncker in a statement after the Commerce Department announced the tariffs Thursday.
The Trump administration announced that it is slapping steel and aluminum tariffs on close European allies after months-long negotiations came up short.
President Trump had announced the metal tariffs on March that would place a 25 per cent tariff on imported steel and a 10 per cent tariff on aluminum.
Close allies immediately balked, and the administration granted temporary waivers that expire Friday. The administration could announce the new tariffs as early as Thursday after markets close.
'Global trade is not a gunfight at the OK Corral,' France's finance minister warned after meeting US Commerce Secretary Wilbur Ross to try to find a way to avoid an escalating trade war.
"It's not about who attacks whom, and then wait and see who is still standing at the end," said the finance minister, Bruno Le Maire.
Mexico hit back, announcing tariffs that would hit northern neighbors at the dining room table and the lunch bag, saying it would put tariffs on US steel, pork chops, cold cuts, grapes, apples and berries.
"In response to the decision of the United States to impose tariffs, Mexico will adopt equivalent measures on a variety of products," according to the Mexican finance ministry.
Other products getting hit include pork legs and shoulders, sausages, cranberries, and cheeses, up to "an amount comparable to damage caused by the United States' action."
"We are alienating all of our friends and partners at a time when we could really use their support," said former trade negotiator Wendy Cutler, the Associated Press reported.
In Congress, Sen. Ben Sasse pushed back immediately.
"This is dumb. Europe, Canada, and Mexico are not China, and you don't treat allies the same way you treat opponents. ... 'Make America Great Again' shouldn't mean 'Make America 1929 Again,' he said, CNN reported.
The EU said it would pursue "rebalancing measures" at the World Trade Organization.
"Today is a bad day for world trade. We did everything to avoid this outcome," said EU Commissioner for Trade Cecilia Malmstrom.
Juncker said in his statement: "We will defend the Union's interests, in full compliance with international trade law," the Wall Street Journal reported.
Canadian Prime Minister Justin Trudeau planned to speak Thursday afternoon to give a response. Trump has repeatedly blasted Canada for its trade practices.
The US had a $150 billion trade deficit with the EU last year – a gap that Trump has slammed as "unacceptable".
Ross tried to cool fears, saying: ''If any of these parties does retaliate, that does not mean that there cannot be continuing negotiations," CBC reported.
"We continue to be quite willing and indeed eager to have further discussions with all of those parties," he said.
The administration is planning to impose tariffs on European steel and aluminum imports after failing to win concessions from the European Union, a move that could provoke retaliatory tariffs and inflame trans-Atlantic trade tensions.
The move could invite immediate retaliation from those getting hit with the tariffs.
The EU has already threatened to slap retaliatory tariffs on US orange juice, peanut butter and other goods.
Canada the top source of imported US steel, also is expected to retaliate, although Canadian and US officials are in talks intended to avert the crisis.
US and European officials held last-ditch talks in Paris on Thursday to try to reach a deal, though hopes are low and fears of a trade war are mounting.
Trump blames the European governments rather than broader market forces.
He also has chafed at a 10 per cent tax the EU slaps on US-made cars, the Washington Post reported. When European cars enter the US, they face only a 2.5 percent duty.
The push against Europe comes days after the White House announced the U.S. would go ahead with a separate plan to slap 25 per cent tariffs on $50 billion of Chinese goods.
The administration is also attempting to renegotiate NAFTA.
The tariffs are likely to go into effect on the EU with an announcement before Friday's deadline, according to two people familiar with the discussions. The administration's plans could change if the two sides are able to reach a last-minute agreement, said the people, who spoke only on condition of anonymity to discuss internal deliberations.
Ross told Le Figaro newspaper that the announcement would come Thursday, likely after markets close, and that the Americans remain open to negotiations.
German Chancellor Angela Merkel stressed her opposition to the tariffs Thursday.
"We believe these tariffs aren't compatible with WTO rules," she said in Lisbon. EU leaders want "exceptions from these tariffs and have offered to hold talks on a certain basis".
But if there are no exemptions, she said, "We will respond in an intelligent, decisive and joint way."
EU Commission spokesman Margaritis Schinas said Thursday the European side is "ready to deal with any kind of scenario, and to defend the EU interests and international trade law."
Trump announced in March that the United States would slap a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, citing national security interests. But he granted an exemption to the EU and other US allies; that reprieve expires Friday.
"Realistically, I do not think we can hope" to avoid either US tariffs or quotas on steel and aluminum, said Cecilia Malmstrom, the European Union's trade commissioner. Even if the US were to agree to waive the tariffs on imported steel and aluminum, Malmstrom said, "I expect them nonetheless to want to impose some sort of cap on EU exports."
Malmstrom is meeting US Trade Representative Robert Lighthizer in Paris on Thursday among other international trade chiefs.
If the US moves forward with its tariffs, the EU has threatened to impose retaliatory tariffs on US orange juice, peanut butter and other goods in return.
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.
French Finance Minister Bruno Le Maire called the US tariffs "unjustified, unjustifiable and dangerous".
"This will only lead to the victory of those who want less growth, those who don't think we can develop our economies across the world. We think on the contrary that global trade must have rules in a context of multilateralism. We are ready to rebuild this multilateralism with our American friends," he said.
Tariffs on steel and aluminum imports to the US can help local producers of the metals by making foreign products more expensive. But they can also increase costs more broadly for US manufacturers who cannot source all their needs locally and have to import the materials. That hurts the companies and can lead to more expensive consumer prices, economists say.
"Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade. Nothing," French President Emmanuel Macron said in an impassioned speech Wednesday.
In a clear reference to Trump, Macron added: "These solutions might bring symbolic satisfaction in the short term. ... One can think about making voters happy by saying, 'I have a victory, I'll change the rules, you'll see'.''
But Macron said those "who waged bilateral trade wars ... saw an increase in prices and an increase in unemployment."
Besides the US steel and aluminum tariffs, the Trump administration is also investigating possible limits on foreign cars in the name of national security.
Ross criticised the EU for its tough negotiating position. But German Economy Minister Peter Altmaier insisted the Europeans were ready to negotiate special trade arrangements, notably for liquefied natural gas and industrial goods, including cars.
'Apartments on the site and more than likely offices' – Andrew Moore, CMP Construction.