Trump metal tariffs kick in as global trade war looms

Trump's action to bulk up protections for American steel and aluminium producers restores effective global tariffs of 25 per cent on all imports of the metals and extends the duties to hundreds of downstream products made from the metals, from nuts and bolts to bulldozer blades and soft drink cans.

Trump's hyper-focus on tariffs since taking office in January has rattled investor, consumer and business confidence in ways that economists worry could cause a US recession and further lag on the global economy.

The European Commission, the executive arm of the European Union charged with co-ordinating trade matters, responded swiftly, saying it would impose counter tariffs on 26 billion euros ($A45 billion) worth of US goods from April.

"We are ready to engage in meaningful dialogue," Commission President Ursula von der Leyen told reporters, adding she had tasked Trade Commissioner Maros Sefcovic to resume his talks to "explore better solutions with the US".

"We firmly believe that in a world fraught with geo-economic and political uncertainties, it is not in our common interest to burden our economies with such tariffs."

China's foreign ministry said Beijing would take all necessary measures to safeguard its rights and interests, while Japan's Chief Cabinet Secretary Yoshimasa Hayashi said the move could have a major impact on US-Japan economic ties.

Close US allies Canada, Britain and Australia criticised the blanket tariffs, with Canada mulling reciprocal actions and Britain's trade minister Jonathan Reynolds saying "all options were on the table" to respond in the national interest.

The countries most affected by the tariffs are Canada, the biggest foreign supplier of steel and aluminium to the US, Brazil, Mexico and South Korea, which have enjoyed some level of exemptions or quotas.

Trump initially threatened Canada with doubling the duty to 50 per cent on its steel and aluminium exports to the US but backed off after Ontario province suspended a move to impose a 25 per cent surcharge on electricity exports to the states of Minnesota, Michigan and New York.

That incident whip-sawed US financial markets already jittery over Trump's broad tariff offensive. 

The tariff move was welcomed by US steel producers as restoring Trump's original 2018 metals tariffs that had been weakened by numerous country exclusions and quotas and thousands of product-specific exclusions.

"By closing loopholes in the tariff that have been exploited for years, President Trump will again supercharge a steel industry that stands ready to rebuild America," Steel Manufacturers Association President Philip Bell said.

The escalation of the US-Canada trade war occurred as Prime Minister Justin Trudeau prepared to hand over power this week to his successor Mark Carney, who won the leadership race of the ruling Liberals last weekend.

On Monday, Carney said he could not speak with Trump until he was sworn in as prime minister. 

Trump repeated on social media he wanted Canada as "our cherished Fifty First State".

Canadian Energy Minister Jonathan Wilkinson told Reuters that Canada could impose non-tariff measures such as restricting oil exports to the US or levying export duties on minerals if US tariffs persisted.

Canada, with ample hydropower resources that has made primary aluminium production more cost effective than in the US, has built a commanding position in the US aluminium market, as US smelters once revived by Trump's tariffs have been idled.

China remains the number two supplier of aluminium and goods made from aluminium, but already faces high tariffs to counteract alleged dumping and subsidies, as well as a new 20 per cent tariff that Trump has imposed in the past month over fentanyl trafficking.

Australian Associated Press