President Donald Trump’s metals tariffs draw swift Canada, EU retaliation, counter-tariffs to be imposed

President Donald Trump’s increased tariffs on all US steel and aluminium imports have come into effect, stepping up a campaign to reorder global trade in favour of the US and drawing swift retaliation from Canada and Europe.

Mr Trump’s action to bulk up protections for American steel and aluminium producers restores effective tariffs of 25 per cent on all imports of the metals and extends the duties to hundreds of downstream products, from nuts and bolts to bulldozer blades and soda cans.

US Commerce Secretary Howard Lutnick said nothing could stop the tariffs, which took effect on Wednesday, and Mr Trump would impose trade protections on copper as well.

Canada, the biggest foreign supplier of steel and aluminium to the United States, announced 25 per cent retaliatory tariffs on goods including steel, aluminium, computers, sports equipment and other products worth $C29.8 billion ($A32.8 billion) in total.

Mr Trump’s hyper-focus on tariffs since taking office in January has rattled investor, consumer and business confidence in ways that economists worry could cause a US recession and further lag on the global economy.

The European Commission, the executive arm of the European Union charged with coordinating trade matters, responded swiftly, saying it would impose counter tariffs on up to 26 billion euros ($A45 billion) worth of US goods - often with more symbolic than economic impact - from next month.

Nevertheless, Commission President Ursula von der Leyen told reporters she had tasked Trade Commissioner Maros Sefcovic to resume talks with US officials on the matter.

“We firmly believe that in a world fraught with geoeconomic and political uncertainties, it is not in our common interest to burden our economies with such tariffs,” she said.

China’s foreign ministry said Beijing would take all necessary measures to safeguard its rights and interests, while Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said the move could have a major impact on US-Japan economic ties.

Close US allies Britain and Australia criticised the blanket tariffs, with Prime Minister Anthony Albanese saying the move was “against the spirit of our two nations’ enduring friendship.” However, both countries ruled out immediate tit-for-tat duties.

The other countries most affected by the tariffs are Brazil, Mexico and South Korea, which all enjoyed some level of exemptions or quotas.

The 27 countries of the EU are less impacted, for now. Germany’s Kiel Institute estimated a hit to EU output of only 0.02 per cent, because “only a small fraction” of the targeted products are exported to the US.

The EU’s own counter-measures include dental floss, diamonds, bathrobes and bourbon - goods that likewise account for a small portion of the giant EU-US commercial relationship.

France’s Europe Minister Benjamin Haddad warned, however, that the EU could expand its response to include digital services or intellectual property.

Mr Trump initially threatened Canada with doubling the duty to 50 per cent on its steel and aluminium exports to the US but backed off after Canada’s Ontario province suspended a move to impose a 25 per cent surcharge on electricity exports to some US states.

The back-and-forth on tariffs has left companies unnerved, upending industries from autos to energy.

“Nearly everyone in the economy is struggling to comprehend wild swings in Washington policies, and their implications for everyday decisions,” said Stephen Dover, Franklin Templeton’s chief market strategist.

US steel producers welcomed Wednesday’s move, noting Mr Trump’s 2018 tariffs had been weakened by numerous exemptions.

The escalation of the US-Canada trade war occurred as Prime Minister Justin Trudeau prepares to hand over power to his successor Mark Carney, who won the leadership race of the ruling Liberals last weekend.

Mr Trump repeated on social media he wanted Canada as “our cherished Fifty First State.”