WASHINGTON/BRUSSELS: Canada and Mexico retaliated with levies on billions of dollars of US goods from orange juice to pork, and the EU was set to tax bourbon whiskey and Harley motorcycles, after Washington risked a global trade war to impose steel and aluminium tariffs.
The affront from Europe’s closest ally builds on earlier transgressions to transatlantic ties including Trump’s dumping of the Paris climate accord as well as the nuclear deal with Iran.
The EU on Friday said it had opened legal challenges to the United States at the World Trade Organization (WTO), the Geneva-based arbitrator of international trade disputes that is loathed by Trump.
The bloc also opened proceedings against China, the world’s second biggest economy, in a case involving intellectual property, in an effort to not single out the US, the EU said.
French President Macron told Trump in a telephone call that the tariffs were “illegal” and said Europe would respond in a “firm and proportionate manner”. And speaking to reporters, Macron described the US move as “a mistake in many ways because it responds to existing international imbalances in the worst way — by breaking up and creating economic nationalism. “And nationalism is war.That’s exactly what happened in the 30s,” Macron said.
In Berlin, Chancellor Merkel said the measure “risks touching off spirals of escalation that in the end hurt everyone”. Mexico, too, said it would impose retaliatory duties on a variety of US goods, including steel and a host of agricultural goods, including pork, apples and cheese.
The unprecedented trade tensions are souring a gathering of the so-called Group of Seven or G7 under way in the coastal mountain resort of Whistler, Canada, normally a scene of compromise and trade promotion.
“I’ll be stating very clearly our disagreement with the actions they’ve taken,” Canadian Finance Minister Bill Morneau told reporters ahead of the meetings. “I have every expectation that our other allies around the table will express the same sentiments.”
The prospect of a global trade has roiled financial markets this week, too, even if they were back in positive territory on Friday.
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