European Union prepares measures to counter new United States tariffs

EU official warns of 'arsenal' of measures to respond to Trump's tariffs

EU official warns of 'arsenal' of measures to respond to Trump's tariffs

European shares open lower but investors appear to hold their nerve after the announcement of USA import duties set by.

Lighthizer's meetings with European Union trade chief Cecilia Malmstrom and separately with Japanese Trade Minister Hiroshige Seko were long planned, but they took on added urgency as allies warned the United States moves could provoke a global trade war.

Brussels has already drawn up a hitlist of flagship American products to target for countermeasures if its exports are affected by the tariffs signed off by US President Donald Trump on Thursday.

"It's clear. We need clarity", European Commission Vice President Jyrki Katainen said on Friday.

"Dialogue is always the prime option for the European Union", Malmstroem said.

Trump set import tariffs on Thursday of 25 per cent on steel and 10 per cent on aluminium.

The EU is also maintaining a threat of counter-measures that would target U.S. imports ranging from maize to motorcycles and may publish its list next week to allow industry and other interested parties to give their input.

The White House signalled Wednesday it would water down plans for the contentious tariffs by exempting Mexico, Canada "and possibly other countries as well", in the face of jitters on world markets.

"We are prepared and will be prepared if need be to use rebalancing measures", Katainen said.

German Chancellor Angela Merkel urged dialogue and warned that "no one can win in such a race to the bottom". She said the European Union is "counting on being excluded" from the tariffs.

The EU exports around five billion euros' ($4 billion) worth of steel and a billion euros' worth of aluminium to the USA each year, and the European Commission, the bloc's executive arm, estimates Trump's tariffs could cost some 2.8 billion euros.

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