The International Monetary Fund (IMF) has joined criticism of US President Donald Trump's plan to impose a 25 per cent tariff on steel imports and 10 per cent on aluminium. It warned that such a move would hurt the US, as well as other countries.
The world body said others could follow Trump's precedent by claiming tough trade restrictions were needed to defend national security.
Canada, the largest supplier of steel to the US, said tariffs would cause disruption on both sides of the border, BBC reported.
It is one of several countries that have said they will consider retaliatory steps if the president presses ahead with his plan next week.
EU trade chiefs are reportedly considering slapping 25 per cent tariffs on around $3.5bn of imports from the US.
World Trade Organisation Director General Roberto Azevedo said: "A trade war is in no one's interests." But the rhetoric ramped up as Trump tweeted: "Trade wars are good."
Trump's announcement to impose tariffs came as Canada, the US and Mexico continue talks to renegotiate the North American Free Trade Agreement (NAFTA).
On Thursday, Trump said that he planned a 25 per cent tariff on steel and a 10 per cent tariff on aluminum that would go into effect next week.
Canada is the largest steel exporter to US market, with steel imports from Canada accounting for 16.1 per cent of the US total steel imports in 2017, according to data released by the US Commerce Department.
US stocks witness early losses
US stocks pared early losses to close mixed on Friday, as investors continued to digest President Donald Trump's announcement to impose steep tariffs on steel and aluminum imports.
The Dow Jones Industrial Average fell 70.92 points, or 0.29 per cent, to 24,538.06, reports Xinhua.
The S&P 500 increased 13.58 points, or 0.51 per cent, to 2,691.25. The Nasdaq Composite Index was up 77.31 points, or 1.08 per cent, to 7,257.87.
The US is set to impose 25 per cent of tariff on steel imports products and 10 per cent on aluminum as early as next week, Trump said on Thursday after a meeting with business executives at the White House.
US stocks tumbled for a third straight session on Thursday after the announcement, with all three major indices dropping more than one percent.
Business Roundtable, an association of chief executive officers of America's leading companies, said it strongly disagreed with Trump's announcement because it would hurt the US economy and American companies, workers and consumers by raising prices which would lead to foreign retaliation against US exporters.
For the week, all three major indices suffered big losses, with the Dow, the S&P 500 and the Nasdaq tumbling 3.0 per cent, 2.0 per cent and 1.1 per cent, respectively.