WASHINGTON/BRUSSELS (Feb 11): The European Union said it would respond with "firm and proportionate countermeasures" after US President Donald Trump's decision to impose tariffs on all steel and aluminium imports, escalating fears of a trade war.

Trump signed proclamations late on Monday raising the US tariff rate on aluminium to 25% from his previous 10% rate and eliminating country exceptions and quota deals as well as hundreds of thousands of product-specific tariff exclusions for both metals.

The measures would take effect on March 4, a White House official confirmed. The tariffs will apply to millions of tons of steel and aluminium imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the US duty free under the carve-outs.

The move will simplify tariffs on the metals "so that everyone can understand exactly what it means," Trump told reporters. "It's 25% without exceptions or exemptions. That's all countries, no matter where it comes from, all countries."

Trump said he would follow with announcements about reciprocal tariffs on all countries that impose duties on US goods over the next two days, and said he was also looking at tariffs on cars, semiconductors and pharmaceuticals.

Asked about threats of retaliation by other countries against his new tariffs, Trump said: "I don't mind."

European Commission President Ursula von der Leyen said she deeply regretted the US decision, adding that tariffs were taxes that were bad for business and worse for consumers. EU steel exports to the US have averaged about €3 billion (US$3.1 billion or RM13.84 billion) a year over the past decade.

"Unjustified tariffs on the EU will not go unanswered — they will trigger firm and proportionate countermeasures. The EU will act to safeguard its interests," she said in a statement.

Von der Leyen did not provide details of the response. One option would be to reactivate the tariffs the EU imposed in 2018 that were suspended under a truce agreed between von der Leyen and then-US president Joe Biden.

The EU tariffs on US products such as bourbon, motorcycles and orange juice are currently suspended until the end of March.

EU trade chief Maros Sefcovic described the US decision in a speech in the European Parliament as a "lose-lose scenario".

Trump's latest trade salvo pushed gold prices to a record high on Tuesday on safe-haven demand, with the precious metal hitting US$2,942.70 in Asian trading, before easing to stand 0.1% higher at US$2,909.49 as of 0916 GMT.

Steel imports accounted for about 23% of American steel consumption in 2023, according to American Iron and Steel Institute data, with Canada, Brazil and Mexico the largest suppliers.

Canada, whose abundant hydropower resources aid its metal production, accounted for nearly 80% of US primary aluminium imports in 2024.

Canada's Prime Minister Justin Trudeau on Tuesday called the tariffs "unacceptable".

Speaking on the sidelines of the Paris artificial intelligence summit, Trudeau said Canada would seek to highlight the negative impact of the US tariffs and if necessary its response would be firm and clear.

"Canadians will stand up strongly and firmly if we need to," he said.

Trump also will impose a new North American standard requiring steel imports to be "melted and poured" and aluminium to be "smelted and cast" within the region to curb US imports of minimally processed Chinese and Russian metals that circumvent other tariffs.

While China exports only tiny volumes of steel to the US, it is responsible for much of the world's excess steel capacity, according to the US. It says subsidised production in China forces other countries to export more and leads to transshipment of Chinese steel through other countries into the US to avoid tariffs and other trade restrictions.

Following losses in Asian and European steelmakers on Monday, shares of Chinese steelmakers dropped further on Tuesday, while shares in US steel and aluminium makers jumped ahead of the proclamations.

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