US President Donald Trump has struck a defiant tone, saying trade wars are good and easy to win, after his plan to put tariffs on imports of steel and aluminium triggered global criticism and a slide in world stock markets.
The European Union raised the possibility of taking countermeasures, France said the duties would be unacceptable, and China urged Trump to show restraint. Canada, the biggest supplier of steel and aluminium to the US, said it would retaliate if hit by US tariffs.
US stocks opened sharply lower on Friday as investors fretted about a potential global trade war.
Trump said on Thursday that a plan for tariffs of 25 per cent on steel imports and 10 per cent on aluminium products were designed to safeguard American jobs in the face of cheaper foreign products and would be formally announced next week.
"When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win," Trump tweeted on Friday.
"Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big. It's easy!" he wrote. It was not clear which country he was referring to.
The prospect of retaliation from Canada, China and Europe sent world stocks tumbling towards a 2.5 per cent weekly loss as investors turned to traditional safe havens such as government bonds, gold and the Japanese yen.
"It is a real worry because Europe is an open global economy so it isn't just about US versus China," said Ian Ormiston, European equity fund manager at Old Mutual Global Investors. "And we will see retaliation, there are no two ways about it."
The European Commission, the EU's executive, called the US tariffs a blatant intervention that amounted to protectionism and promised to act "firmly" in response.
The EU, which sees itself as a global counterweight to a protectionist-leaning Trump, made no mention of retaliation but spoke of countermeasures that conform with World Trade Organisation rules.
"We see international trade relations as a win-win situation," a European Commission spokesman said.
"We don't see this as a situation where, like in a zero-sum game, one party loses because another party wins. Trade is beneficial for everyone. It needs to take place on the basis of rules and these rules are in place."
Safeguard measures, last deployed by Europe in 2002 after then US President George W. Bush imposed steel import duties, would be designed to guard against steel and aluminium being diverted to Europe from elsewhere if US tariffs come in.
But to conform with WTO rules such measures would have to apply to imports from all countries and could also hit producers including China, India, Russia, South Korea and Turkey.
"A trade war between Europe and the United States will only have losers," French Finance Minister Bruno Le Maire said.
While US officials said some details of the tariffs still needed to be ironed out, White House spokeswoman Sarah Sanders said on Friday the levels of 25 per cent for steel and 10 per cent for aluminium were not expected to change.
"This is something he's wanted to do for a while. Never say never, but I think he's pretty committed to moving this forward," Sanders told a press pool.
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