European Union slaps retaliatory tariffs on U.S. as trade war rattles markets

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When the USA tariffs on steel and aluminum went into effect on June 1, the European Union said they were "illegal", pledged to impose its own tariffs, and filed a case against the the World Trade Organization.

European Union trade officials have described the United States tariffs on steel and aluminum - justified by the Trump administration on grounds of national security -- as "illegal". The higher tariffs had previously been registered with the World Trade Organization (WTO).

India finalized its decision during a week when the global trade war escalated, with the United States enacting $50 billion in tariffs on Chinese goods, and the European Union imposing $3 billion in levies on such products as US -made bourbon, peanut butter and Harley-Davidson motorcycles. Canada's retaliatory measures begin on July 1, and Mexico and other nations have also announced they will respond.

China says will hit back if the latest tariff threats from Trump materialize, while India slaps retaliatory levies on USA goods.

Earlier this month, Mexico imposed a series of tariffs on $3 billion worth of United States exports of pork, apples, potatoes, bourbon as well as different types of cheese.

American tariffs on steel and aluminum have also hit Canada, Mexico, India, Turkey and India.

The European Union triggered the first phase of retaliation against the US over its metal-import tariffs imposed on national-security grounds, making good on more than three months of threats to hit American goods with tit-for-tat levies.

"The US is abusing the tariff methods and starting trade wars all around the world".

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In two weeks, the U.S. is due to start taxing $US34 billion in Chinese goods.

Most economists say the outcome of higher global import tariffs will drive up costs for consumers, offsetting much of the benefit of protecting domestic industries for the country imposing them.

However, many lawmakers have expressed concerns that the tariffs will escalate into a trade war that will ultimately hurt American interests. The big trade conflagration, however, is with China.

Trump recently approved heavy tariffs on $50 billion of Chinese imports.

Earlier this week, Mr Trump threatened to impose 10% duties on an additional $200bn (£150bn) worth of Chinese goods which he said would come into force if China "refuses to change its practices".

The commission formally adopted the new tariffs, allowing them to come into effect on June 22.

"The president has been so belligerent that it becomes nearly impossible for democratically elected leaders - or even a non-democratic leader like (Chinese president) Xi Jinping - to appear to kowtow and give in", said Philip Levy, senior fellow at the Chicago Council on Global Affairs and a former White House trade adviser.