The United States has said it was moving ahead with tariffs on aluminium and steel imports from Canada, Mexico and the European Union, ending a two-month exemption and potentially setting the stage for a trade war with some of the country’s top allies.

Commerce Secretary Wilbur Ross told reporters on a telephone briefing on Thursday that a 25 percent tariff on steel imports and a 10 percent tariff on aluminium imports from the EU, Canada and Mexico would go into effect at midnight (04:00 GMT) on Friday.

“We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved,” he said.

Ross told reporters that talks with Canada and Mexico over revising the North American Free Trade Agreement (NAFTA) were “taking longer than we had hoped.”

Talks with Europe had “made some progress” but not enough for additional exemptions, he said in a conference call from Paris.

‘Bad day for world trade’

European Commission President Jean Claude-Juncker responded to the announcement, saying the EU will impose countermeasures on the US.

“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 [World Trade Organisation] and will announce counterbalancing measures in the coming hours,” he added.

“It is totally unacceptable that a country is imposing unilateral measures when it comes to world trade.”

Al Jazeera’s Peter Sharp, reporting from London, said “it’s going to be a difficult time,” adding that “over the next 24 hours, we will see … if this is indeed going to be a trade war.”

The newly announced tariffs could also hinder the negotiations between the US, Canada and Mexico on NAFTA.

Responding to the US tariffs, Mexico announced it will impose tariffs on US imports, including pork bellies, apples, grapes, cheeses and flat steel, among other products.

Canada also promised retaliatory tariffs worth $12.8bn on US exports including steel, aluminium, whiskey and orange juice.

German Chancellor Angela Merkel said the EU response will be “intelligent, decisive and joint”, adding that the tariffs are incompatible with WTO rules.

France’s President Emmanuel Macron spoke forcefully against the tariffs, calling them “illegal” and a “mistake”.

He said he will speak with US President Donald Trump on Thursday evening, warning that the move could close the door on other talks.

Fears of a global trade war are already weighing on investor confidence and could hinder the global economic upturn. European officials argue that tit-for-tat tariffs will hurt growth on both sides of the Atlantic.

Brazil, Argentina and Australia have agreed to limit steel shipments to the US in exchange for being spared the tariffs, the US Department of Commerce said. Tariffs will remain on imports from Japan.

[SOURCE: Al Jazeera and news agencies]