Mexico aims tariff countermeasures at key Republican-contested districts

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Canadian Foreign Minister Chrystia Freeland said Ottawa will impose retaliatory tariffs on $16.6 billion worth of US exports and challenge USA steel and aluminum tariffs under the North American Free Trade Agreement as well as at the World Trade Organization.

International Trade Secretary Liam Fox, who spoke to the USA commerce secretary yesterday, said the United Kingdom would not rule out counter-measures over the "patently absurd" tariffs.

European Commission President Jean-Claude Juncker, who will be at the G7 table with the seven other country leaders, expressed strong opposition to Thursday's decision.

Canada, Mexico and Europe had been exempted until June 1 from import duties of 25 per cent on steel and 10 per cent on aluminum when they were first imposed in March.

"Our other expectation is that the government of Canada will take immediate action to ensure that there is no diversion of steel from other countries". In fact, they account for half of US steel exports.

A Commerce Department investigation earlier this year determined a need to ensure adequate US steel production capacity to supply the military.

However, his decision was met with strong criticism including from Republicans, which in part lead to him to delay the tariff on the EU, Mexico and Canada, key us allies, until June 1.

But the Trump administration hasn't hesitated to reach for any tool in its arsenal to tackle what it sees as unfair trade.

Trudeau also noted that now the US has a $2 billion USA dollar surplus in steel trade with Canada and that Canada buys more American-made steel than any other country in the world.

"We've gone from unpredictability to chaos", said Doreen Edelman, an global trade lawyer at Baker Donelson.

European officials had assumed that Trump would follow through with duties on their exports (negotiations over the Iran deal having already convinced them that trying to dissuade the US president from scoring diplomatic own-goals was a futile enterprise).

"We don't think just raising issues is adequate", he said, adding that the WTO needed more than just the "tweak".

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

NY stocks extended opening losses after Ross announced the tariffs.

"We are deeply disappointed that the United States has made a decision to apply tariffs to steel and aluminium imports from the European Union on national security grounds", a government spokesman said.

The announcement by Commerce Secretary Wilbur Ross immediately drew retaliatory action by Mexico, Canada and threats of the same by the European Union, while Germany warned against "spirals of escalation that hurt everyone". She said the tariffs were in violation of the rules of the World Trade Organization (WTO).

"If any of these parties does retaliate that does not mean there can not be continuing negotiations", Ross said.

"Americans remain our partners, our allies and our friends", he said.

The Trump administration is turning to a little-used weapon in trade policy: Section 232 of the Trade Expansion Act of 1962. But the knock-on effects of the Trump administration's tariffs will further dent global free trade.

"The Section 232 steel and aluminum tariffs have already had major, positive effects on steel and aluminum workers and jobs and will continue to do so long into the future". "It's totally unacceptable that a country is imposing unilateral measures when it comes to world trade".

Guajardo said retaliation was aimed at products chosen to hit districts with important lawmakers who had been warning Trump not to mess with Mexico. "And it was a disaster".