WASHINGTON — The Trump administration delivered a gut punch to America's closest allies Thursday, imposing tariffs on steel and aluminum from Europe, Mexico and Canada in a move that drew immediate vows of retaliation.
Stock prices slumped amid fears of a trade war, with the Dow Jones industrial average falling nearly 252 points, or 1 percent, to 24,415.84.
The import duties threaten to drive up prices for American consumers and companies and are likely to heighten uncertainty for businesses and investors around the globe.
Commerce Secretary Wilbur Ross said the tariffs — 25 percent on imported steel, 10 percent on aluminum — would take effect today.
President Donald Trump had originally imposed the tariffs in March, saying a reliance on imported metals threatened national security. But he exempted Canada, Mexico and the European Union to buy time for negotiations — a reprieve set to expire at midnight Thursday.
Other countries, including Japan, America's closest ally in Asia, are already paying the tariffs.
The administration's actions drew fire from Europe, Canada and Mexico and promises to quickly retaliate against U.S. exports.
"This is protectionism, pure and simple," said Jean-Claude Juncker, president of the European Commission.
The EU earlier threatened to counterpunch by targeting U.S. products, including Kentucky bourbon, blue jeans and motorcycles. David O'Sullivan, the EU's ambassador in Washington, said the retaliation will probably be announced in late June.
Mexico complained that the tariffs will "distort international trade" and said it will penalize U.S. imports including pork, apples, grapes, cheeses and flat steel.
In Canada, Prime Minister Justin Trudeau said: "These tariffs are totally unacceptable." Canada announced plans to slap tariffs on $12.8 billion worth of U.S. products, ranging from steel to yogurt and toilet paper.
"Canada is a secure supplier of aluminum and steel to the U.S. defense industry, putting aluminum in American planes and steel in American tanks," Trudeau said. "That Canada could be considered a national security threat to the United States is inconceivable."
The U.S. tariffs coincide with — and could complicate — the Trump administration's separate fight over Beijing's strong-arm tactics to overtake U.S. technological supremacy. Ross is leaving today for Beijing for talks aimed at preventing a trade war with China.
The world's two biggest economies have threatened to impose tariffs on up to $200 billion worth of each other's products.
The steel and aluminum tariffs could also complicate the administration's efforts to renegotiate the North American Free Trade Agreement with Canada and Mexico, a pact that Trump has condemned as a "disaster."
Trump offered the two U.S. neighbors a permanent exemption from the steel and aluminum tariffs if they agreed to U.S. demands on NAFTA. But the NAFTA talks stalled.
Ross said that there was "no longer a very precise date when they may be concluded," and that as a result, Canada and Mexico were added to the list of countries hit with tariffs.
Likewise, the Trump trade team sought to use the tariff threat to pressure Europe into reducing barriers to U.S. products. But the two sides could not reach an agreement.
Measured purely in dollars, the tariffs don't amount to much in America's $20 trillion economy. Speaking on CNBC on Thursday, Ross called the tariffs "blips on the radar screen."