Trump tariffs: IMF pleads against trade war as EU threatens to retaliate - as it happened

Graeme Wearden (now) and Nick Fletcher

from on 2018-03-02 21:56 (#3H56G)

Donald Trump's plan to impose tariffs on steel and aluminium imports have caused international criticism, and sent markets sliding

9.56pm GMT

And finally, here's our latest news story on the growing fears of a global trade war:

Europe has warned Donald Trump to expect retaliatory strikes against American icons like Harley-Davidson, Levi's jeans and Kentucky bourbon, if he sparks a trade war by going ahead with punitive US tariffs on foreign steel.

The European commission president, Jean-Claude Juncker, warned there would be consequences for the US if Trump's threat of a 25% tariff on steel and 10% on aluminium imports takes effect.

When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big. It's easy!

9.41pm GMT

Ed Conway of Sky News says the criticism of president Trump's plans from the IMF is significant:

V unusual for the IMF to issue a statement like this. Still less against their biggest shareholder. Their reaction to US tariffs: pic.twitter.com/38iOvq3aCo

9.28pm GMT

Marketwatch points out that Donald Trump's pledge to impose new tariffs went down well with one audience -- the US steel and aluminum producers.

The American Iron and Steel Institute said it was "pleased" with the tariffs announcement, while the Aluminum Association said "we appreciate" the president's commitment to help the aluminum industry.

9.10pm GMT

Ding ding goes the Wall Street closing bell.

#DJIA closes down three percent for the week. pic.twitter.com/u8uQq7Yj4C

8.58pm GMT

Wall Street is staging a late recovery!

In the last few minutes of trading, the Dow is bouncing back from its lows, and the S&P and the Nasdaq are now up for the day....

8.56pm GMT

Here's a reminder that Canada, Brazil, South Korea and Mexico will take the biggest hit from new steel tariffs:

Canada and Brazil are likely to bear the brunt of any tariffs on #steel imposed by @realDonaldTrump, as their steel comprised 16% and 13%, respectively, of US steel imports as of September 2017. pic.twitter.com/AzbVHrd2sp

8.45pm GMT

Gregory Daco of Oxford Economics suggests the new steel tariffs could scupper the hopes of the US rejoining the NAFTA trade bloc:

Interesting breakdown of US #steel imports. If Canada and Mexico aren't carved out of tariffs (it doesn't seem they will) then consequences would be very real for #NAFTA negotiations pic.twitter.com/3TqkV8yzLH

8.36pm GMT

Canada is mulling its own response to the threat of tariffs on its steel and aluminum sales to the US.

UPDATED: Canada seeks exemption to Trump's steel tariffs, vows retaliation https://t.co/h5xlcjSOxz

8.14pm GMT

With 45 minutes to go, the Dow is down 222 points, or 0.9%, and heading for a weekly loss.

8.12pm GMT

The vice-president of the European Commission, Jyrki Katainen, has warned that Trump's new tariffs could trigger a global trade war.

Katainen, who is also the former prime minister of Finland, points out that protectionism helped to create the Great Depression of the 1930s.

A thread on US #SteelTariffs:
1. The announced US tariffs on steel and aluminium are a very dangerous protectionist move. US allies, like the EU, will be more affected than China, where most of the overcapacity is.

2. US economy's competitiveness will be hit, as downstream industries will pay much higher prices. #SteelTariffs

3. There is also a serious risk of global trade war, as more economies may take safeguard measures to protect their markets from diverted steel trade flows. #SteelTariffs

4. The EU will not stay idle and is preparing countermeasures against the US to rebalance trade flows. #SteelTariffs

5. At the same time, we believe it is still possible and preferable to avoid a trade war, as it is difficult to stop it once it starts. #SteelTariffs

6. Last time a domino effect of tit-for-tat protectionist measures swamped the world after 1929, and it did not end well. #SteelTariffs (thread ends)

7.53pm GMT

Within Europe, Germany could take the biggest hit from Trump's new tariffs. That's because it's the biggest EU-based exporter of steel to the US:

https://t.co/ghJwWqfNrg pic.twitter.com/j7YdtANuzV

7.45pm GMT

Business Insider have crunched the latest trade figures to show that Canada would take the biggest hit from the tariffs announced on Thursday:

Here are the countries that could get hit hardest by Trump's steel tariff. (Chart by @AndyKiersz) https://t.co/aClnQhkGmv pic.twitter.com/TmOlh4iNI6

7.33pm GMT

Just in: The governor of Wisconsin, Scott Walker, has called on Donald Trump to reconsider his decision on steel and aluminum tariffs.

He warns that US companies which use steel could be driven abroad, costing Americans their jobs.

.@GovWalker, who is announcing new jobs at United Alloy in Janesville today, says he opposes @realDonaldTrump proposed steel tariffs. #news3 pic.twitter.com/5hnxS4gWD5

7.23pm GMT

6.59pm GMT

Here's our news story on Wilbur Ross's comments (complete with that tin of soup)....

6.57pm GMT

It's also emerged today that Carl Icahn, a former special adviser to Donald Trump, sold $31.3m of shares in a company heavily dependent on steel imports last week.

That was good timing by Icahn - as shares in Manitowoc have fallen sharply since the tariffs were announced.

6.55pm GMT

NBC are reporting that Donald Trump announced his plans for steel and aluminum tariffs without any internal review by government lawyers or his own staff.

Officials are also claiming that the president was 'gunning for a fight' when he made the decision.

According to two officials, Trump's decision to launch a potential trade war was born out of anger at other simmering issues and the result of a broken internal process that has failed to deliver him consensus views that represent the best advice of his team.

On Wednesday evening, the president became "unglued," in the words of one official familiar with the president's state of mind.

NBC: Nobody at State, Treasury or Defense was told a tariff decision was being announced yesterday; no paperwork was ready; there was no plan for communicating with foreign countries, Congress or the public; people at the meeting hadn't been vetted. https://t.co/agEjzjqeFt

6.38pm GMT

A quick market update:

The Dow Jones is still wallowing in the red, and currently down 241 points or 1% at 24,367. That follows those hefty losses in Europe today.

6.35pm GMT

Newsflash: The International Monetary Fund is pleading with Donald Trump not to trigger a trade war.

"The import restrictions announced by the U.S. President are likely to cause damage not only outside the U.S., but also to the U.S. economy itself, including to its manufacturing and construction sectors, which are major users of aluminum and steel.

We are concerned that the measures proposed by the U.S. will, de facto, expand the circumstances where countries use the national-security rationale to justify broad-based import restrictions.

6.26pm GMT

Here's the full quote from Jean-Claude Juncker, threatening to hit back against America with new tariffs on sales into Europe:

"We will put tariffs on Harley-Davidson, on bourbon and on blue jeans - Levi's.

"We are here and they will get to know us. We would like a reasonable relationship to the United States, but we cannot simply put our head in the sand."

6.21pm GMT

Boom!: Europe is threatening to hit back against America, with new tariffs on some famous US names.

Jean-Claude Juncker, head of the European Commission, has told reporters that tariffs could be imposed on Harley-Davidson motor bikes, bourbon whiskey and Levi's jeans.

EU preparing tariff measures targeting "Harley-Davidson, bourbon, Levi's," Juncker says pic.twitter.com/YgeTgfpTP8

.@JunckerEU to reporters in Hamburg on #Trump #steeltariffs: "We will not sit idly when European industry and jobs are threatened. #EU preparing import duties for US products including Harley-Davidson, Bourbon and Levi's jeans." pic.twitter.com/iFiZJEgBTi

Middle aged man planning a mid-life crisis? BAD LUCK, PAL https://t.co/ObwhwXsHhf

6.09pm GMT

Wilbur Ross has also confirmed that Trump's tariffs will be applied globally.

That dashes hopes that UK and other European manufacturers might be exempt, and raises the chances of retaliatory action by the EU.

"Of the options that I presented, the president chose one -- which was put broad tariffs on all products from all countries.

"We have to deal with a global problem on a global basis" to stamp out "this recurring phenomenon" of shipments going through other nations to evade tariffs.

5.58pm GMT

President Trump's commerce secretary, Wilbur Ross, reckons people are over-reacting.

He appeared on CNBC earlier this afternoon, to argue that consumers wouldn't notice any impact from higher steel and aluminium tariffs.

"In a can of Campbell's Soup, there are about 2.6 pennies worth of steel. So if that goes up by 25 percent, that's about six-tenths of 1 cent on the price on a can of Campbell's soup.

I just bought this can today at a 7-Eleven ... and it priced at a $1.99. Who in the world is going to be too bothered?"

Wilbur Ross: "I just bought this can today at a 7-Eleven ... and it priced at a $1.99. Who in the world is going to be too bothered?" pic.twitter.com/AQDzfQuHZK

5.40pm GMT

Canadian prime minister Justin Trudeau said US tariffs on steel and aluminium would be "absolutely unacceptable".

He added that he had made this point directly to Trump, and said his officials would continue to engage with all levels of the US government in the coming days.

5.29pm GMT

The threat of a trade war in the wake of Donald Trump's plan to impose tariffs on imported steel and aluminium has rattled stock markets, which had already reverted to their volatile ways of a couple of weeks ago.

But Trump is not the only concern for European markets, of course. Investors were also nervous ahead of Sunday's Italian election and the vote in Germany on the same day by members of the SDP party about whether to join a coalition government.

We have heard much of it before, and there wasn't much for traders to latch on to. Mrs May made it clear the UK would like a deal that is geared to its unique needs. The PM once again stated that 'no deal was better than a bad deal', which could prove to be costly.

5.15pm GMT

The World Trade Organisation has said a trade war is in no one's interests.

In a statement WTO director general Roberto Azevedo said:

The WTO is clearly concerned at the announcement of US plans for tariffs on steel and aluminium. The potential for escalation is real, as we have seen from the initial response of others.

A trade war is in no one's interests. The WTO will be watching the situation very closely.

4.42pm GMT

More on possible EU retaliation, courtesy Reuters:

RTRS sources: EU considering retaliation worth $3.5bn on US steel#SteelTariff pic.twitter.com/9AxeqfjjHS

4.17pm GMT

The market falls are continuing.

The Dow Jones Industrial Average is now down 1.3%, the FTSE 100 has fallen 1.4% and Germany's Dax is down 2.3%. Chris Beauchamp, chief market analyst at IG, said:

The selling continues apace across markets this afternoon, with the phrase 'sea of red' getting an outing once more. It is indeed a 'risk-off' afternoon in the old-fashioned sense of the term, with gold being furiously bought as risk assets are dumped unceremoniously overboard.

Tariffs do not go down well, it seems. European markets, with their heavy concentrations of industrial stocks, are suffering a double whammy of US tariff concerns and the return of their old foe, a stronger euro. In London the big news has been the speech from the Prime Minister. As ever, it has generated the usual variety of responses, but the aim of conciliatory approach from the UK runs through the text, emphasising the need for both to come together. Given it has been so heavily trailed there has been little market reaction, and the ball now lies in Brussels' court.

4.06pm GMT

The Kremlin may be concerned about the proposed Trump tariffs but Russia's steel makers should be pretty much unaffected, Reuters is reporting:

Russian metals and mining companies face relatively little harm from any introduction of U.S. tariffs on steel and aluminium imports, analysts and company representatives said on Friday.

Russia's top two steelmakers and its leading aluminium producer saw their share prices fall after President Donald Trump said he would impose hefty tariffs to protect U.S. producers...

3.24pm GMT

More indications of a positive US economy, which in turn adds to the case for further interest rate rises from the Federal Reserve.

US consumer confidence came in at a better than expected last month, according to the University of Michigan. Its consumer sentiment index rose from 95.7 in January to a final figure of 99.7, better than the expected 99,5 but just below the initial reading of 99.9. The rise came amid the stock market turmoil seen in February and before the latest trade war fears, but followed the Trump tax reforms.

Consumer sentiment remained quite favorable in February, at its second highest level since 2004. Consumers based their optimism on favorable assessments of jobs, wages, and higher after-tax pay. The highest proportion of households since 1998 reported that their finances had improved compared with a year ago and anticipated continued gains during the year ahead.

Economic news heard by consumers continued to be dominated by the tax reform legislation and net job gains, which was untarnished by the consensus view that interest rates would increase and stock prices would remain volatile. Although rising interest rates was seen as a reason to temper their longer term outlook for the overall economy, only a modest moderation in the pace of economic growth was anticipated.

3.06pm GMT

A bit of historical context. The last time the US went big on protectionism it ended in the Great Depression. Here's a piece from my colleague Dominic Rushe from earlier in the year when Trump was also talking tough on trade :

2.59pm GMT

With no sign of recovery in stock markets Fawad Razaqzada, market analyst at Forex.com, said:

Will we really see the start of a trade war? The truth is, the world relies on the US in one way or the other. Retaliation could only hurt the retaliator. So these warnings may not be backed up by action. In fact, there is even the small possibility that Trump may do a U-turn. However, Trump does seem to enjoy global confrontation and with mid-term elections fast approaching, he may press ahead as he aims to protect domestic companies from what he feels unfair trade arrangements.

So, as we head into the weekend, sentiment towards both the stock markets and the dollar are clearly negative. The dollar is doing slightly better against commodity currencies, which tend to be move up and down with risk appetite changes. However, against the euro and in particular, the yen, a safe haven currency, the greenback looks rather weak.

2.45pm GMT

An economist's view of the Trump tariffs:

One reason why Trump's tariffs are likely to backfire. The number of people who work in steel consumption (who will suffer because of higher prices) is much greater the number who work in steel production (who will benefit). pic.twitter.com/vgHKhZTGrq

2.38pm GMT

The prospect of a trade war prompted by Donald Trump's proposed tariffs on steel and aluminium imports has unsurprisingly sent US markets sharply lower.

The Dow Jones Industrial Average is currently down 322 points or 1.2% while the S&P 500 opened down 0.8% and the Nasdaq Composite just over 1%.

2.14pm GMT

More from Trump, policy by tweet:

When a country Taxes our products coming in at, say, 50%, and we Tax the same product coming into our country at ZERO, not fair or smart. We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!

2.10pm GMT

European Aluminium, a Brussels based association representing more than 600 plants in 30 European countries, has called on the European Commission and the EU to protect the industry in the wake of Trump's tariff plans. It said:

"We regret President Trump's decision to impose a tariff on all aluminium imports independent of their country of origin. European aluminium exports to the US, in view of both their quantity and characteristics, do not pose any threat to US national security.

"Most importantly, this blanket tariff does not address the root cause of the main challenges faced by the aluminium industry today: the unsustainable and steady increase of aluminium overcapacities in China.

1.59pm GMT

Speaking of possible European retaliation, French finance minister Bruno Le Maire said there would be a co-ordinated European response if the move went ahead.

He told reporters all options were on the table and there would be a "strong, unilateral and co-ordinated" response from the EU. He added:

These unilateral measures are not acceptable. They would have a major impact on the European economy and French companies like Vallourec and Arecelor.

1.54pm GMT

Long gone are the days when Donald Trump hailed the spectacular performance of the stock market:

The Latest: White House spokeswoman Sarah Huckabee Sanders says President Trump is not concerned about the stock market decline following his announcement of new aluminum and steel tariffs. https://t.co/FWqhQSdgel

1.49pm GMT

The American Chambers of Commerce in the EU is also not happy with the President's tariff proposals:

US government plans to impose tariffs and limits on imports of steel and aluminium on the basis of national security, authorised under Section 232 of the Trade Expansion Act of 1962, would fail to appropriately address legitimate concerns regarding global overcapacity. It also risks a deterioration in transatlantic economic and political relations that could threaten jobs, investment and security on both sides of the Atlantic.

The American Chamber of Commerce to the EU (AmCham EU) shares the US government's concerns regarding global overcapacity of steel and aluminium, which can hurt domestic jobs in the EU and the US and encourage unfair trading practices. However, this decision would unfairly target European manufacturers and would not address Chinese excess capacity, the root cause of the issue. As referenced by European Commission President Jean-Claude Juncker, the decision could lead to retaliatory measures by the EU against US companies and also could contravene World Trade Organization (WTO) rules. American companies employ more than 4.7 million workers in Europe, with aggregate US investment totalling more than a2 trillion in 2017.

1.46pm GMT

Steel tariffs of 2002-2004 were a disaster, cost 200,000+ jobs in user industries- more than TOTAL employment in steel industry at that time https://t.co/jT13jsiaWf

1.45pm GMT

President Trump's planned tariffs may not actually take place, says Andrew Kenningham, chief global economist at Capital Economics. But if they do, there is likely to be retaliation. He says:

Steel and aluminium account for about 2% of world trade, so the direct impact on the global economy of the tariffs President Trump announced yesterday would be minimal. But the fact that they are being justified under a flimsy pretext of national security increases the risks of retaliation.

Will these tariffs actually be implemented? Not necessarily: after all, we are talking about Trump! He said he will sign the executive order next week, but there will doubtless be opposition from Congressional Republicans, US corporations and US allies. This, and the dip in the stock market, may cause Trump to change his mind. And it is possible that when the order is written it will allow exceptions for allies, such as Canada and Germany, who (unlike China!) are big sources of US steel imports....

Will other governments retaliate? Probably. Canada has said it would "take measures to protect its domestic trade interests and workers"; Brazil has said the same; and the EU has reportedly discussed possible targets for retaliation. Other governments may also move to protect their own steel industries, which would be legal under WTO terms. That said, we suspect that any retaliation, from these countries and China, would be targeted and proportionate in order to try to prevent the problem escalating.

What is the biggest risk? The real worry is that this marks a turning point in US trade policy, away from bluster and brinkmanship towards actual protectionist measures. We have consistently warned that this would become more likely as the mid-term and presidential elections approach. If so, President Trump may discover that, contrary to his tweet this morning, there are rarely any winners from trade wars.

It would be no surprise if Trump changes his mind, or waters down, his proposed steel/aluminium tariffs. After all, they would hurt many of the US's closest allies more than China, which is not even one of the top ten steel exporters to the US. pic.twitter.com/foMESKL7Ex

1.36pm GMT

An influential member of the European Parliament has warned that Europe must retaliate if the US imposes tariffs on steel and aluminium.

Manfred Weber, chairman of the EPP Group of centre-right MEPs, suggested that Europe would need to throw its forces into any trade war, saying:

"The US President is playing a very dangerous game. A trade dispute is to the detriment of everyone. But if Donald Trump increases tariffs on European goods for no reason, then Europe must react.

Priority must be given to protecting jobs in Europe. The EU has to show its strength."

1.18pm GMT

1.16pm GMT

The Wall Street Journal has generally taken a more positive view of Donald Trump's presidency than rival newspapers (to the anger of some staff). But not on this occasion.

Today, the WSJ editorial board have roasted the president's move on tariffs, saying it will hurt the US economy and weaken his own efforts.

Donald Trump made the biggest policy blunder of his Presidency Thursday by announcing that next week he'll impose tariffs of 25% on imported steel and 10% on aluminum.

This tax increase will punish American workers, invite retaliation that will harm U.S. exports, divide his political coalition at home, anger allies abroad, and undermine his tax and regulatory reforms.

The @WSJ astutely point out, "Mr. Trump seems not to understand that steel-using industries in the U.S. employ some 6.5 million Americans, while steel makers employ about 140,000." https://t.co/xTXirIDw75

Damning WSJ editorial about Trump's steel tariffs - follows their criticism of his "whining" about Sessions and call for Jared and Ivanka to step down this week https://t.co/5LSbyzlgdZ via

1.05pm GMT

President Trump just sent another tweet, defending his tariffs (in the face of widespread criticism from home and abroad)

We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON'T HAVE STEEL, YOU DON'T HAVE A COUNTRY!

12.49pm GMT

If a trade war is really breaking out, then kitchen equipment maker Electrolux has just fired another shot - by threatening to pull investment in America.

Reuters has the details:

Sweden's Electrolux, Europe's largest home appliance maker, said on Friday it would put on hold a planned $250 million investment in the United States after President Donald Trump announced he would impose tariffs on imported aluminium and steel.

"We are putting it on hold. We believe that tariffs could cause a pretty significant increase in the price of steel on the U.S. market," Electrolux spokesman Daniel Frykholm said.

12.36pm GMT

Economics professor Adam Posen has roundly blasted the idea of imposing fresh tariffs on imports of steel and aluminium into the US.

Posen, the president of the Peterson Institute for International Economics, told CNBC the plan was "just straight up stupid,", adding:

This is fundamentally incompetent, corrupt or misguided."

Steel is just a tiny input in the U.S. gross domestic product (GDP) - which is why it's so crazy.

'Straight up stupid,' 'incompetent' and 'misguided': Economist @AdamPosen tells us on the #tariffs https://t.co/dM1pmKvDnk

12.02pm GMT

The Mexican peso is sliding this morning, making it the worst-performing major currency against the US dollar.

Trump's protectionist stance on trade wars and tariffs are undermining hopes that America could rejoin the NAFTA pact.

Trump's tweet and tariffs definitely getting people freaked out about the prospects for a NAFTA agreement. The peso is today's biggest loser. https://t.co/owsma438YV pic.twitter.com/4G51ccgmZb

11.45am GMT

The European Commission has warned it will impose countermeasures against America, if new tariffs are imposed on EU aluminium and steel.

EC president Jean-Claude Juncker has vowed to 'react firmly' to president Trump's move, saying:

"Instead of providing a solution, this move can only aggravate matters. 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. The EU will react firmly and commensurately to defend our interests.

The Commission will bring forward in the next few days a proposal for WTO-compatible countermeasures against the US to rebalance the situation.

11.33am GMT

Trump on trade: "Trade wars are good, and easy to win". Markets clearly not liking that assessment. Stock futures are tanking and dollar at lowest yen level since since 2016

11.32am GMT

Russia has also expressed concern over Donald Trump's plans.

"We know that extreme concern has been expressed in many European capitals with these kinds of decisions.

We share this concern and are carefully analysing the situation which is unfolding now in trade relations after this announcement."

11.15am GMT

Stock markets are falling deeper into the red, following Donald Trump's declaration that America could easily win a trade war.

In London, the FTSE 100 is now down 73 points, or 1%, at 7101. That's a new three-week low.

A negative vibe lingered across financial markets on Friday, after Donald Trump's vow to impose severe tariffs on imports of steel and aluminium sparked fears of a global trade war.

In a move that dealt a blow to global sentiment, Trump said on Thursday that the United States would set tariffs of 25% on steel imports and 10% on aluminium.

Futures are falling even more after Trump tweets that trade wars are good and easy to win. https://t.co/sd1mRP4o0x pic.twitter.com/Wa795VtiR0

11.01am GMT

Newsflash: President Trump has tweeted that it will be easy for America to win a trade war:

10.56am GMT

David Lowe, head of international trade at law firm Gowling WLG, predicts that president Trump could announce more protectionist policies in the weeks ahead.

Lowe says:

"All the figures suggest that the first year of any administration is the calm before the storm. The groundwork is done and the wind builds. Now Trump's first year is complete with the potential for the floodgates to open, it's safe to assume this may not be the only shock policy announcement."

10.52am GMT

Anders Fogh Rasmussen, the former head of Nato and ex-Danish prime minister, warns that tariffs will hurt a range of US businesses who use steel.

He also fears that Europe could face pressure to become more protectionist too.

.@realDonaldTrump, a trade war will RISK American jobs. US steel-using industries employ 80 times more than the steel industry.

But it will also make all freedom-loving democracies poorer & less free. If the US turns protectionist how long can Europe hold out? Last man standing pic.twitter.com/yO78TJ48RX

10.47am GMT

Canada, Brazil and Russia will all be hit hard by new tariffs on steel and aluminium imports into America, according to the Economist Intelligence Unit.

They say:

The countries that will be hardest-hit by the tariff include some of the US's biggest trading partners.

The commerce department reported that the biggest importers of steel in 2017 were (in descending order) Canada, Brazil, South Korea and Russia. China was 11th, supplying just 2% of the total. For aluminium, the biggest importers were Canada, Russia, China, the UAE and Bahrain. (China supplied 11% of the total.)

We expect other countries, notably China, to retaliate in kind. The tariffs are a particular snub to the Chinese government, which had sent its leading trade envoy, Liu He, to Washington to discuss the US-China relationship.

10.34am GMT

Bank of England Mark Carney is discussing cryptocurrencies now - there's a live feed here.

10.32am GMT

German Foreign Minister Sigmar Gabriel said in a media interview that he was"extremely concerned" about Donald Trump's planned tariffs on steel and aluminum.

"A sweeping move against the rest of world by the US", Gabriel told the Funke group of newspapers, "would hit our exports and jobs amongst the hardest".

Gabriel said:

"I hope that President Trump reconsiders his announcement.

We need to do everything possible to avoid an international trade war."

"US president Donald Trump is risking a world-wide trade conflict and a spiral of protectionism that will end up also costing American jobs".

10.29am GMT

President Trump's plan to slap tariffs on steel and aluminium imports has gone down badly with the Institute of Economic Affairs, the free-market think-tank.

Kate Andrews of the IEA it will hurt Americans:

The much uglier side of Trump's economic policy. Protectionism is destabilizing, inefficient, and very likely to have a negative impact on American consumers https://t.co/437FBhZtSl

Why he's taking this additional step is unclear. Perhaps it really comes down to election promises (of which this was hinted, but not explicit as, say, 'the wall'). Not many details. Unclear how thought-through this really is.

10.09am GMT

Mark Carney has also warned that Bitcoin looks like a bubble, and could have a 'pretty brutal reckoning'

Mark Carney gave this warning to investors as we sat in the banknote area of the museum: "[#Bitcoin] has all the hallmarks of a bubble. And normally they end with a pretty brutal reckoning". #crypto pic.twitter.com/TPIaJb2EXd

10.07am GMT

Breaking: Mark Carney, the Bank of England governor, has suggested greater regulatory controls over cryptocurrencies such as bitcoin.

"Cryptocurrencies act as money at best, only for some people and to a limited extent, and even then only in parallel with the traditional currencies of the users.

Carney, laying his boot into bitcoin pic.twitter.com/eqzxJ6fUqB

9.59am GMT

Roy Rickhuss, the head of the Community union, fears that jobs will be lost in the UK and the US if these tariffs are imposed.

The new US steel tariffs are deeply worrying for the UK steel industry. Donald Trump is putting jobs at risk on both sides of the Atlantic. Thousands of steelworkers across the country voted for Brexit on the promise it would deliver a new era of international trade.

The PM talks of a 'special relationship' with the US and we now need to work together to ensure the high quality steel products that the UK exports to the US are exempt from this tariff. Community stands ready to work with industry and government to secure the assurances we need.

9.52am GMT

Conservative MP Simon Clarke is also very concerned about the impact on Britain's steel industry:

Tariffs are the worst possible option for the world economy and a major threat to UK #steel in particular. Will be asking @BritishSteelUK for their thoughts and raising with ministers. https://t.co/MDHa0an6dP

9.48am GMT

Back to tariffs.... and British unions are very alarmed by the prospect of America imposing swingeing costs on steel and aluminium imports.

This requires a coordinated global approach. Whilst we all too well understand the frustrations of the US sector, measures such as these smack of short-termism, protectionism and would be rife with unintended consequences for global trade and for the users of steel in the US.

"At a UK level, our sector exports some 360 million worth of high-value steel products into the US each year, almost 15% of our exports. These measures, would seriously undermine our ability to compete in this market. Equally there is significant apprehension about the indirect impacts of these measures in the form of steel trade diverted away from the US to other markets, such as the UK. In short, these measures would cause serious damage to the prospects of many steel producers here.

"If next week's official announcement does reveal the worst, there is a strong message here for the UK Government as well. In its imagined post-Brexit role as the vanguard for global free trade, it must remember that not everyone is on the same page and not everyone is playing by the same rules.

Whilst we have to resist any urge to mirror such protectionist moves, we must at the same time be clear-eyed and equip ourselves with tools to respond effectively and protect our interests when necessary."

9.40am GMT

Newsflash: Activity across Britain's building sector picked up last month, but remains weak.

Data firm Markit reports that commercial construction strengthened in February, but civil construction and housebuilding was weaker.

Anecdotal evidence suggested that fragile business confidence and ongoing political uncertainty remained key factors holding back client demand.

9.17am GMT

In other news, the Weinstein Company has been saved from bankruptcy.

The firm, co-founded by disgraced media mogul Harvey Weinstein, is being acquired by an investment team led by billionaire Ron Burkle and Maria Contreras-Sweet, the former head of President Obama's Small Business Administration.

9.08am GMT

Newsflash: Germany's main stock index, the Dax, has hit a six-month low.

German stocks slide to the lowest in 6 months. Down 4% this week and down 12% from the peak just over a month ago. pic.twitter.com/vDZunQWGJo

9.06am GMT

German Foreign Minister Sigmar Gabriel has said he's 'very concerned' by Donald Trump's move, and called on the EU to respond decisively.

Speaking to German media, Gabriel says he hopes Trump will reconsider the tariffs announced last night.

*GABRIEL SAYS EU MUST REACT DECISIVELY TO U.S. STEEL TARIFFS *GABRIEL SAYS REASONING FOR U.S. STEEL TARIFFS INCOMPREHENSIBLE

8.56am GMT

China has expressed "grave concern" over US plans to impose tariffs on steel and aluminium, with the move likely to hurt US allies as well as Chinese producers.

Related: Reactions to US steel tariffs

8.43am GMT

Australia's government is already scrambling to protect its manufacturers from the impact of new tariffs on steel and aluminium.

Federal Trade Minister Steve Ciobo labelled the decision, which comes a week after Prime Minister Malcolm Turnbull raised the issue with the president in Washington DC, "disappointing".

"The imposition of a tariff like this will do nothing other than distort trade and ultimately, we believe, will lead to a loss of jobs," he told reporters in Sydney on Friday.

8.37am GMT

History shows that trade wars aren't good for stocks - and encourage nervous investors to pile into safe-haven government debt instead.

What happened when US imposed levies of as much as 30% on steel under George W. Bush in 2002? Well, trade partners retaliated, stocks & the dollar slid, the yield on 10y Treasury almost halved. That pattern matched what happened in U.S. markets yesterday, Bloomberg's Regan noted. pic.twitter.com/snOS8mZb0Y

8.36am GMT

European steelmakers are being hit this morning, with ArcelorMittal's shares down 2%.

Across the markets, the industrials sector has lost 1% while basic materials is down 0.9%.

8.09am GMT

Britain's blue-chip share index has hit its lowest level since 12 February, as worries of a trade war sweep through the City.

The negative open follows a sharply lower close on Wall St that flowed into Asia overnight after President Trump sparked concerns of a protectionist trade war with China and the EU by announcing his intention to impose import tariffs on steel and aluminium.

7.59am GMT

Several experts have warned that Donald Trump's decision to impose tariffs on steel and aluminium imports could trigger retaliatory action, and even a full-blown trade war:

"The world stands on the brink of a trade war as Donald Trump announces severe tariffs on steel and aluminium... this is how recessions start.

"Trade is just about the only thing economists are agreed on - more is better."

As had been foreshadowed yesterday, President Trump announced new tariffs on Steel (25%) and aluminium (10%) imports late yesterday.

Many of the US's main trading partners have said they will respond with reciprocal action. Generally, restrictions on world trade would be less negative for relatively closed economies, like the US, and hence positive for USD. But the risk of a bilateral trade war with China makes the current situation different, given China's large holdings of USTs.

Under the pretext of national security, Trump has announced tariffs on steel and aluminium imports. However, it still remains unclear whether this will be applied to imports from all countries or just some. Whilst one of Trump's aims is to encourage China to reform its practises, the reality is that Canada and Brazil are bigger exporters to the US than China.

Whilst market eyes have been firmly on interest rate expectations and recent volatility, no one was preparing for a potential trade war. The broader market sold off as these tariffs are creating and uncertain environment trade wise and the market hates any interventionist policy from governments. Whilst US steelmakers and aluminium makers rallied hard following the announcement, the Dow closed 430 points lower, whilst the S&P 500 and the Nasdaq closed 1.6% and 1.7% respectively.

7.52am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

"You're going to have protection for the first time in a long time."

The Nikkei index in Japan fell 2.4%, Hong Kong and South Korea were down 1.6%, and the ASX200 in Sydney was off 1% in early afternoon trading. Asian steelmakers bore the brunt. South Korea's Posco fell 3% and Japan's Nippon Steel 4%.

Michael McCarthy of CMC Markets in Sydney said it was a "sharp reminder of the initial negative reaction to the election of Mr Trump ... An explanation may come, but the initial market interpretation of the move is rank populism. The lack of structure makes anticipating further measures and possible responses to retaliatory moves difficult to predict."

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