European Union says it will start to impose tariffs on USA on Friday

US President Donald Trump

US President Donald Trump

The European Union (EU) has introduced retaliatory tariffs on United States goods as a top official launched a fresh attack on President Donald Trump's trade policy.

European Union trade official Cecilia Malmström said that the European Union "did not want to be in this position", but that it had no choice. Trump imposed tariffs of 25 per cent on steel imports and 10 per cent on imported aluminium from the European Union on June 1.

The EU has also filed a case with the World Trade Organisation (WTO), claiming Trump's tariffs were "pure protectionist" and "illegal".

A trade war is brewing between the world superpowers, United States of America and China and this could have dire economic consequences, not just for the two countries but globally too. Beijing has vowed to immediately retaliate with its own tariffs on US soybeans and other farm products in a direct shot at Mr. Trump's supporters in America's heartland. "The U.S.is accustomed to holding "big sticks" for negotiations, but this approach does not apply to China".

"The rules of worldwide trade, which we have developed over the years hand in hand with our American partners, can not be violated without a reaction from our side", she said.

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John Murphy, a senior vice president at the U.S. Chamber of Commerce, estimates that $75 billion in U.S. products will be subject to new foreign tariffs by the end of the first week of July.

The English-language paper cited research by the Rhodium Group saying that Chinese investment in the United States declined 92 percent to $1.8 billion in the first five months of the year, its lowest level in seven years. "Needless to say, if the USA removes its tariffs, our measures will also be removed".

"Changes in trade policy could cause us to have to question the outlook", Federal Reserve Chairman Jerome Powell said during a panel discussion at a European Central Bank conference in Sintra, Portugal.

However, many lawmakers have expressed concerns that the tariffs will escalate into a trade war that will ultimately hurt American interests. The move is in response to the U-S tariffs imposed on E-U metal exports. The United States has accused China of stealing US intellectual property, a charge Beijing denies. He charged that a succession of poorly negotiated accords - including the North American Free Trade Agreement and the pact that admitted China into the World Trade Organization - put American manufacturers at an unfair disadvantage and destroyed millions of USA factory jobs. Turkey is targeting USA products and India has announced tariffs on 29 US products, including steel and iron, almonds, walnuts, and chickpeas.

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