In a move that could lead to a full-fledged trade war between Washington and the European Union (EU), the Trump administration Thursday levied heavy tariffs on metal imports from the European countries, Canada and Mexico. With the latest trade sanctions, which will come into effect Thursday midnight, the government is almost done with the implementation of its previously announced tariff plan.

Meanwhile, as expected, the EU and the governments of Canada and Mexico announced retaliatory tariffs on imports from the US, triggering a massive stock sell-off on Wall Street that saw several S&P 500 and Dow components plunging.

The announcement came a day before the exemption allowed to metal manufacturers in those countries, from potential tariffs, is due to expire. Apparently, it is the government’s reaction to the outcome of a meeting between a US trade delegation and its EU counterparts in Paris, which appears to have failed.

Soon after the meeting, the French and German finance ministers, in separates statements, clarified that in the event of the US imposing tariffs on imports, their governments would respond by taking similar actions against US exporters. Mexico was quick to respond and vowed strong retaliatory measures, with the highlight being restrictions on the import of apples, pork bellies, and flat steel from the US.

The EU and the governments of Canada and Mexico announced retaliatory tariffs on imports from the US

In a harsher reaction, the Canadian foreign minister said tariffs would be levied on various US products, including steel, aluminum, alcoholic beverages and food products, with effect from Thursday. Products worth CAD 17 billion will be covered under the plan, which will attract taxes in the range of 10% to 25%.

The latest trade sanctions are part of a broad-based program announced by President Trump in early March to ‘save’ domestic metal manufacturers, who according to him are bearing the brunt of the unfair practices adopted by some of the country’s trade partners.

The first country to face the US action was China – with heavy tariffs on steel and aluminum imports – for allegedly infringing upon US’ intellectual property rights. In a tit-for-tat reaction, China levied taxes on many US products, prompting Trump to slap additional sanctions against Beijing.