Global trade war on the cards? Donald Trump warns of more tariffs on EU as trading partners trudge cautiously

US President Donald Trump's push to impose tariffs on trading partners may escalate a global trade war after he warned of slapping further tariffs on European Union goods, Reuters reported. On March 12, Donald Trump threatened to impose more tariffs. This comes after major US trading partners said they would take retaliatory steps to counter trade barriers already erected by the US.

Donald Trump has enforced 25% duties on all US steel and aluminium imports. In case EU follows through with its plan to enact counter tariffs on some US goods next month, the US would impose additional penalties, Trump said on Wednesday.

European Union is set to target up to $28 billion worth of US goods including dental floss, diamonds, bathrobes and bourbon in its counter-measures. However, these account for only a minuscule portion of the mammoth  EU-U.S. commercial relationship.

Tariffs are the taxes charged by nations or trade blocks on goods imported from other countries. The companies that bring the goods into the country or trade blocks pay the tax to the government or concerned authority. Tariffs are also used as strategic tools in trade and diplomatic negotiations.

"Whatever they charge us, we're charging them," Reuters quoted Donald Trump as saying at the White House.

President of the European Commission, Ursula von der Leyen, informed that the EU bloc will resume talks with US officials and said, "It is not in our common interest to burden our economies with such tariffs," Reuters reported.

At the White House, Trump alleged that the Irealnd, an EU member country, lured away US pharmaceutical companies with Irish Prime Minister Micheal Martin by his side.

Later at a White House ceremony, Martin struck a conciliatory posture by invoking the history of free trade between the two nations.

"Let us continue to build on that foundation," he said, as Trump looked on.

"Let us continue to work together to make sure that we maintain that mutually beneficial, two-way economic relationship that has allowed innovation and creativity and prosperity to thrive," Martin said.

China's foreign ministry asserted that it would safeguard its interests, Japan's Chief Cabinet Secretary Yoshimasa Hayashi warned about its impact on US-Japan economic ties. Meanwhile, Britain and Australia condemned the blanket tariffs, but they will not be imposing retaliatory tariffs anytime soon. The second biggest provider of steel to the US, Brazil would not immediately retaliate, Reuters reported.

Canada counters tariffs

In response to broader tariffs by Donald Trump, Canada has already imposed tariffs worth a similar amount on US goods. In addition to this, Canada's central bank also cut interest rates to have a significant economic impact on the US.

Canada ordered 25% retaliatory tariffs on steel and aluminium, besides tariffs on computers, sports equipment and other products worth $20 billion in total. Canada is the biggest foreign supplier of steel and aluminium to the United States.

Canada's Finance Minister Dominic LeBlanc said, "We will not stand idly by while our iconic steel and aluminium industries are being unfairly targeted," Reuters reported.