European Commission President Jean-Claude Juncker has warned retaliation was inevitable, with the bloc also faced with the task of calculating what the knock-on effect on the global steel industry will be.
Mr Trump’s announcement means additional tariffs of 25 per cent on steel and 10 per cent on aluminium will be levied on all imports to the United States – meaning big producers such as South Korea, Japan, China and Brazil will be looking for new European markets.
Mr Juncker said: “The Commission will bring forward in the next few days a proposal for World Trade Organisation-compatible countermeasures against the US to rebalance the situation.
“The EU has been a close security ally of the US for decades. We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk.
“I had the occasion to say that the EU would react adequately and that’s what we will do.”
The EU is likely to hit back by imposing import restrictions on such famous US brands as whiskey from Kentucky, Florida orange juice and Harley-Davison motorcycles.
European Commissioner for Trade Cecilia Malmström stressed that the EU was preparing to act to protect its internal markets.
She explained: “The Commission will monitor market developments and if necessary will propose WTO-compatible safeguard action to preserve the stability of the EU market.”
The World Trade Organisation permits such protective measures in cases of sudden surges, such as steel flows being diverted from the US market.
Prior to Mr Trump’s decision being confirmed yesterday, France, Germany, Italy and Spain met on Tuesday to agree to impose safeguard measures should the US impose tariffs on Asian steel.
Germany’s state secretary at the ministry for the economy, Matthias Machnig, said. “Absolutely, we have to talk about safeguard measures as well.
“And we had a discussion this morning together with Italy, France and Spain and Germany, and we totally agree on these issues.”
Speaking hours before Washington’s announcement, European Commission Vice President Jyrki Katainen said the trade war would not be “only a problem between Europe and the United States because it has an impact to steel production, the steel market elsewhere too.”
He added: “We can end up easily in a situation where we are in a trade war with the two fronts. And only because of one decision made by the President of the United States.”
US Commerce Secretary Wilbur Ross has claimed safeguard measures could actually boost developed markets, arguing that by shutting out imports, producers in every country would have to focus on supplying their home market. The ultimate victim should be China, which would start to choke on its massive overcapacity.
He added: “If other countries adopt something similar to what we are doing, then you have in hand a solution to the global problem. Thus far, no one has stepped into a leadership role … In essence, these recommendations are that the U.S. step into that leadership role and encourage other countries to adopt similar measures.”