The EU has launched its first counteroffensive against Washington's punishing steel and aluminum tariffs while the US began meetings in Canada with outraged finance ministers from its top trading partners.
Meanwhile in Washington, Trump floated the possibility of scrapping the 24-year-old North American Free Trade Agreement in favour of separate bilateral deals with Canada and Mexico. Brussels and Ottawa filed legal challenges at the World Trade Organization against Washington's decision. The EU, Canada and Mexico also threatened stiff retaliatory tariffs as they pushed back against President Donald Trump's multi-front trade offensive.
British Prime Minister Theresa May said she was "deeply disappointed" and reiterated a call for Britain and the EU to be "permanently exempted" from the "unjustified" metals tariffs. As the Group of Seven ministerial opened in Canada, US Treasury Secretary Steven Mnuchin faced stern reaction from his counterparts, who accused Trump of jeopardizing the world economy with steps that would prove job killers for all concerned. Canada Finance Minister Bill Morneau said the G7 discussions would be "difficult." "We are sending the message that these measures are not helpful," he told reporters.
And French Finance Minister Bruno Le Maire said Europe "will not negotiate with a gun to our heads." They are joined at the meeting by officials from Britain, Germany, Italy and Japan. "Unfortunately, we are being treated to a G6 + 1, with the United States squaring off against the rest and risking the economic destabilization of the planet," Le Maire said.
The US imposed the tariffs in March, but gave Canada and the EU -- the biggest sources of foreign aluminum and steel for the US -- a grace period that ended at midnight Thursday. Trump's decision drew furious responses from Canadian President Justin Trudeau, German Chancellor Angela Merkel and French President Emmanuel Macron. The EU is preparing to slap tariffs on US products including bourbon, motorcycles and blue jeans worth up to 2.8 billion euros ( 3.3 billion).
"If players in the world don't stick to the rule book, the system might collapse. That is why we are challenging the US and China at the WTO," EU Trade Commissioner Cecilia Malmstrom said. Macron told Trump in a telephone call that the tariffs were "illegal," and Merkel said the measure "risks touching off spirals of escalation that in the end hurt everyone." Canada unveiled a package of counter-tariffs on US imports valued at Can 16.6 billion (US 12.8 billion).