"There's no question this would be a very serious escalation in the trade conflict", Alden said.
The decision to impose tariffs came as a shock to Canada and Mexico, as both countries thought they would be spared from the levies because of earnest negotiations they have had with administration officials over NAFTA. South Korea has not negotiated an exemption for its aluminum exports.
The EU has threatened to retaliate with tariffs on Harley Davidson motorcycles and bourbon, measures aimed at the political bases of Republican legislators who they wanted to stand up to Trump.
The UK government's spokesperson stated that Britain and other European Union countries are close allies of the U.S. and thus should be "permanently and fully exempted" from the USA metal tariffs.
The tariff exemption is to end at midnight tonight. U.S. Steel (X) rose 3.6%, Steel Dynamics (STLD) pulled back to a 0.6% gain.
Ross said that Argentina, Australia and Brazil will continue to be exempt from the tariffs though there have been "limitations" implemented "on the volume [of steel and aluminum] they can ship to the U.S".
Mexico responded to USA steel and aluminum tariffs by imposing wide-ranging "equivalent" measures, including on steel and farm products, the economy ministry said on Thursday. Even if the US were to agree to waive the tariffs on imported steel and aluminum, Malmstrom said, "I expect them nonetheless to want to impose some sort of cap on European Union exports".
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Despite retaliatory threats from allies, however, Ross insisted that reaching deals with Canada, Mexico and European partners should not be put on hold just because the U.S.is moving forward with implementing the stiff tariffs.
Trudeau and French President Emmanuel Macron made their cases separately Wednesday to dissuade Trump, who is using a national-security clause in US trade law to justify the move.
"Such a move would hit American manufacturers with higher costs, slow the growth of the USA construction sector, and put the brakes on job creation in both of these key industries", the Chamber said.
For the past couple of months, it has looked like a trade war might be avoided, Greg Valliere, chief global strategist at Horizon Investments, wrote in a note distributed early Thursday morning.
"By targeting those who are not responsible for overcapacities, the U.S.is playing into the hands of those who are responsible for the problem". But they can also increase costs more broadly for US manufacturers who cannot source all their needs locally and have to import the materials.
The move will likely trigger serious retaliation from the three countries and push the USA to the edge of a trade war.
However, French President Emmanuel Macron, on Wednesday, warned against the dangers of starting a trade war.