Trump's trade war looks set to be a costly affair

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President Trump’s latest trade war salvo has not been warmly welcomed in countries facing tariffs on their steel and aluminium exports – Mexico, Canada and the EU – or in the US itself. The automotive trade is expecting disruption and higher costs, while the CEO of the American Apparel & Footwear Association, fearing retaliation, told Bloomberg: “To make this move against our closest allies, especially during the renegotiation of Nafta, creates more difficulty and chaos for the business community. Let’s be clear, ‘Made in USA’ apparel and footwear will suffer as a direct result.”

The EU has already begun legal proceedings through the WTO, while the trade commissioner said: “Throughout these talks, the US has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU. This is not the way we do business, and certainly not between longstanding partners, friends and allies. Now that we have clarity, the EU’s response will be proportionate and in accordance with WTO rules.”

The EU has released a 10-page list of products affected by its countermeasures, which include sweetcorn, cranberries, tobacco, make-up, clothing and a long list of steel products. The charges, which are technically a suspension of tariff concessions, come to approximately €2.8bn annually. Canada meanwhile has imposed “trade-restrictive countermeasures” on C$16.6bn ($12.8bn) of US goods.