The European Union (EU) will impose "counter-balancing measures" after the United States announced tariffs on steel and aluminium imports from the Canada, Mexico and the EU, the European Commission chief said.
Trump is placing a 25 per cent steel tariff and 10 per cent tariff on aluminum on Canada, effective at midnight.
The tariffs were introduced by the US President in response to the markets being flooded by cheap Chinese steel which has endangered the competitiveness of the industry in the West.
While shares of Canadian steel firms headed lower, their US counterparts got an initial boost before giving back some of their initial gains.
The U.S. administration launched a national security investigation last week into auto and truck imports, using the same 1962 law that he has applied to curb incoming steel and aluminium.
"We have such an integrated procurement supply chain that it's very hard to fathom that there would be a security risk imposed by Canada on the United States", she told reporters Thursday morning at CANSEC, a major arms and defence trade show, before the USA announcement was made.
"It's not everyone attacking the other and we see who remains standing at the end", he said, declaring that the stiff taxes would be "unjustified, unjustifiable and dangerous".
"We have to believe at some point common sense will prevail", Trudeau said, adding that wasn't reflected in today's actions by the U.S.
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Stocks in the U.S. fell as the administration ignored the pleas from business lobbying groups including the U.S. Chamber of Commerce to forego tariffs.
The EU believes these unilateral USA tariffs are unjustified and at odds with World Trade Organisation rules.
During a speech in Brussels, Jean-Claude Juncker, president of the European Commission, promised to announce retaliatory sanctions later on Thursday. Should the United States and European Union ramp up various tariffs, including on cars, the impact could knock 0.4% from U.S. growth and 0.3% from the EU.
He urged the United Kingdom and Netherlands governments, the EU and European trade bodies to continue talks with the USA to find a solution.
The White House said in a statement Thursday that those tariffs have already had "major, positive effects" on steel and aluminum workers.
On CTV News Channel, Aluminum Association of Canada Chief Executive Jean Simard called the USA move "unfortunate", and also called the national security argument a "non-issue", explaining that the two countries are highly integrated when it comes to defence supply.
An official statement from the European Commission says it is determined to shield the EU steel and aluminium markets from damage caused by additional imports that might be coming into the EU as a result of the closure of the U.S. market. But, after exempting Argentina, Australia, Brazil and South Korea, the nations that will be hurt the most are the US's closest allies.
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 USA president from scoring diplomatic own-goals was a futile enterprise). "We will respond appropriately", she said.