Confirming expectations, Wilbur Ross announced the steel, aluminum tariffs exemptions were lifted on EU, Mexico, and Canada. This prompted angry responses from the head of the EU bloc's executive Jean-Claude Juncker who said that the European Union will impose counter measures immediately.
"This is a bad day for world trade," Juncker said in a speech in Brussels. "So we will immediately introduce a settlement dispute with the WTO and will announce counter balancing measures in the coming hours."
"It is totally unacceptable that a country is imposing unilateral measures when it comes to world trade."
Juncker also said that he is "concerned by this decision" which he defined as "protectionism, pure and simple." The European head with a penchant for alcohol said that steel overcapacity remains at the heart of the problem, and "the EU is not the source of but on the contrary equally hurt by it", clearly referencing China.
He also said that the EU has consistently indicated openness to discussing ways to improve bilateral trade relations with the US "but have made it clear that the EU will not negotiate under threat" and added that "by targeting those who are not responsible for overcapacities, the U.S. is playing into the hands of those who are responsible for the problem."
"The U.S. now leaves us with no choice but to proceed with a WTO dispute settlement case and with the imposition of additional duties on a number of imports from the US. We will defend the Union’s interests, in full compliance with international trade law."
Needless to say, the export-heavy Germans were furious too:
GERMAN BDA EMPLOYERS' ASSOCIATION SAYS U.S. DECISION ON TARIFFS MARKS A TURNING POINT IN TRANSATLANTIC TRADE, STARTS A DANGEROUS SPIRAL OF PROTECTIONISM: RTRS
In response, some were quick to point out the facts:
US Stocks slumped on the news.
In an amusing twist, Wilbur Ross told CNBC shortly after the tariffs announcement that "we don't know why the stock market is going down." Maybe because more sellers than buyers?
Meanwhile, the opposite took place in Treasuries, where yields are sliding once again:
And the safe-haven dollar is bid:
As Italian bond yields are rising once again...