UPDATE - US imposing metals tariffs on EU, Canada, Mexico

ADDS WHITE HOUSE LINE, NEW EU, CANADA, GERMANY REACTIONS

By Michael Hernandez

WASHINGTON (AA) - The U.S. announced Thursday it will impose sweeping tariffs on steel and aluminum imports coming from the European Union, Canada and Mexico after the Trump administration failed to secure concessions from close trading partners.

Commerce Secretary Wilbur Ross told reporters on a conference call that the U.S. would begin instituting a 10 percent aluminum tariff on imports, and a 25 percent tariff on steel beginning Friday.

Canada, Mexico and the E.U. had initially been granted temporary exemptions to the import penalties after President Donald Trump announced them in March. The exemptions were set to expire at the end of the week.

The exemptions were made in the hopes of gaining other economic benefits for the U.S., but Ross reportedly said not enough progress had been made to warrant an extension.

The White House later said talks would continue even as the penalties loomed for the U.S.'s closest allies.

During an interview with the CNBC television network, Ross sought to downplay the effects of the import duties, saying: "If the market, to the degree it was surprised, it will have to adjust to that. But markets adjust to facts."

But beyond markets, the economic penalties are likely to further rattle relations with some of the U.S.'s closest allies, some of whom are already facing the prospects of U.S. sanctions for seeking to abide by an agreement the U.S. and world powers brokered with Iran, but which Trump pulled the U.S. out of despite stiff opposition from Europe.

When Trump initially made the decision to institute steel and aluminum tariffs he did so under the pretext of national security, but the rationale has been balked at by the U.S.'s closest security partners in Europe and Canada.

Carla Qualtrough, Canada’s public services and procurement minister, said Canada and the U.S. economies and trade are so intertwined that there is no danger to U.S. security.

“We have such an integrated procurement supply chain that is difficult to fathom that there would be a security risk imposed by Canada on the United States,” she told reporters in Ottawa Thursday morning. She said there are plans in place to deal with the tariffs.

“We prepare for this kind of thing,” Qualtrough said.

- 'Bad day' for trade

Canadian Prime Minister Justin Trudeau is scheduled to hold a news conference on the issue later Thursday.

Across the Atlantic, European Commission President Jean-Claude Juncker vowed the bloc would respond to the measures, and said they are incompatible with World Trade Organization (WTO) rules.

"This is protectionism, pure and simple," Juncker said. "It’s a bad day for world trade.

"The U.S. leaves us no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of U.S. imports."

French French Finance Minister Bruno Le Maire went a step further, warning the E.U. would have no choice but to "enter a trade war" with Washington over the matter.

"Our U.S. friends must know that if they were to take aggressive actions against Europe, Europe would not be without reaction," he warned.

Germany also slammed Trump’s decision and argued that the tariffs were “illegal”, and could not be justified with “national security” concerns.

“This measure rather bears the danger of an escalation spiral, which would harm everyone,” Chancellor Angela Merkel’s spokesman Steffen Seibert said.

German Foreign Minister Heiko Mass said the European Union member states will retaliate with a firm joint response.

“Our response to ‘America First’ can only be: ‘Europe united’,” he said in a press release.

The E.U., Canada and Mexico account for roughly half of the U.S.'s steel and aluminum imports, according to the New York Times.

*Barry Ellsworth contributed to this story from Canada, Ayhan Simsek contributed from Berlin, Germany.