An affront to close allies

Key US trading partners yesterday condemned President Donald Trump's decision to slap punitive tariffs on foreign steel and aluminium as "protectionism" and an affront to allies, as fears grew of a global trade war.

Chancellor Angela Merkel of Germany, Europe's biggest economy and Nato ally, urged dialogue and warned that "no one can win in such a race to the bottom".

Berlin backs the European Union in "seeking dialogue with the United States, but also with countries that could be affected, like China," she said.

Earlier, German Economy Minister Brigitte Zypries said: "This protectionism is an affront to close partners like the European Union and Germany and limits free trade."

The EU has threatened retaliatory tariffs on items from steel to peanut butter, bourbon and denim -- most of which are produced in states that Trump needs to win to be re-elected.

Close US ally Japan warned the tariffs of 25 percent on imported steel and 10 percent on aluminium "could have a grave impact on the economic relationship" between the world's top and third-largest economies.

The world's second-biggest economy, China, derided the tariffs as "a serious attack on normal international trade order".

In a sharp reversal from decades of a US-led drive towards more open trade, Trump declared on Thursday that America had been "ravaged by aggressive foreign trade practices".

"It's really an assault on our country," he blasted, announcing the tariffs on the metals used in everything from cars to construction, roads to railways.

Trump said the tariffs -- which will come into effect after 15 days -- will not initially apply to Canada and Mexico, and that close partners on security and trade could negotiate exemptions.

Canada was the largest US source of steel last year, followed by Brazil, South Korea, Russia, Mexico, Japan and Germany. The US neighbour to the north was also by far the largest supplier of alumina and aluminium, followed by China, Russia and the United Arab Emirates.

Last week Trump stunned the world -- and his own aides -- with an off-the-cuff announcement of his plan, even before White House lawyers judged the legality of the tariffs.

While the full economic impact remains unknown, the political fallout was swift with the top Republican in Congress Paul Ryan publicly denouncing Trump's move, and with top economic advisor Gary Cohn resigning in protest.

Meanwhile, eleven nations signed a slimmed-down version of the Trans-Pacific Partnership (TPP) trade agreement Thursday, after US withdrew from the deal.

The TPP, which would have represented 40 percent of the global economy and nearly one-quarter of its trade, was left for dead after Trump pulled out to pursue his "America First" agenda.

But the revamped deal, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is still a significant achievement and a victory for openness, its supporters said at the signing ceremony in Santiago, Chile.

The pact includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, representing together 13.5 percent of the global economy.