Trump warns EU on retaliatory tariffs, says Irish tax policies lured US firms

U.S. President Donald Trump on Wednesday vowed to respond to the European Union's threat to impose counter tariffs on 26 billion euros ($28 billion) worth of U.S. goods from next month after Trump implemented blanket tariffs on steel and aluminum imports.

"Of course I will respond," Trump told reporters at the start of a meeting with Irish Prime Minister Micheál Martin in the Oval Office. He said Ireland, a member of the European Union, was among countries taking advantage of the United States.

Trump said Ireland had used its tax policies to lure away pharmaceutical and other companies from the United States, but U.S. reciprocal tariffs would help rebuild U.S. manufacturing.

"There's a massive deficit that we have with Ireland and with other countries," he said, saying he blamed U.S. leadership for allowing U.S. pharmaceutical companies and others to move to Ireland due to its tax policies.

"I have great respect for Ireland … but the United States shouldn't have let it happen," he said.

Trump's increased tariffs on all U.S. steel and aluminum imports took effect on Wednesday, ratcheting up a global trade war and drawing swift retaliation from Canada and Europe.

Trump's action to bulk up protections for American steel and aluminum producers restores effective tariffs of 25% on all imports of the metals and extends the duties to hundreds of downstream products.

Canada, the biggest foreign supplier of steel and aluminum to the United States, announced 25% retaliatory tariffs on those metals along with computers, sports equipment and other products worth C$29.8 billion in total. Canada's central bank also cut interest rates to prepare the country's economy for the damage.

The European Commission said it would impose counter tariffs on up to 26 billion euros ($28 billion) worth of U.S. goods next month.