President Trump plans to impose steel, aluminum tariffs on the European Union

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"We did everything to avoid this outcome", said Malmström, who had repeatedly met with Trump administration officials in Washington in the last couple of months, hoping to reach an exemption agreement.

Mexico buys more steel and aluminum from the United States than it sells.

The Dow Jones industrial average fell 1% in morning trade on the stock market today, right above its 50-day moving average.

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.

Besides the US steel and aluminum tariffs, the Trump administration is also investigating possible limits on foreign cars in the name of national security. "We have also consistently indicated our openness to discussing ways to improve bilateral trade relations with the United States but have made it clear that the European Union will not negotiate under threat".

And so the administration made a decision to lift the exemption from the tariffs for those countries.

The Mexican government said that the U.S. action was not justified, and that it would retaliate with its own comparable penalties on USA lamps, pork, fruit, cheese and flat steel.

The United States on Thursday said it was pushing ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, setting the stage for a possible trade war with some of America's top allies.

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European and United States equities lost ground slightly on fears the United States measures could spark a trade war.

Hitting Canada and Mexico with the tariffs could be a huge blow to Nafta talks. Through the first three quarters of 2017, the US ran a relatively minor trade deficit with Canada of about a half-million metric tons, according to Department of Commerce data. But the broader market sank because of trade war fears.

The move will likely trigger serious retaliation from the three countries and push the U.S. to the edge of a trade war.

"We continue to be quite willing, indeed eager, to have further discussions with all of these parties", Ross told reporters, speaking from Paris where he is attending meetings at the Organization for Economic Cooperation and Development.

The European Commission, which coordinates trade policy for the 28 EU members, has said the bloc should be permanently exempted from the tariffs since it was not the cause of overcapacity in steel and aluminium.

"Such a move would hit American manufacturers with higher costs, slow the growth of the US construction sector, and put the brakes on job creation in both of these key industries", the Chamber said. That hurts the companies and can lead to more expensive consumer prices, economists say. "Nothing", French President Emmanuel Macron said in an impassioned speech Wednesday.

"These solutions might bring symbolic satisfaction in the short term".

Ross is scheduled to go to China this weekend for a third round of negotiations.