Trump tariffs show Liam Fox “as useful as a chocolate fireguard”

Stock prices have today slumped amid fears of a trade war, with the Dow Jones industrial average falling nearly 252 points, or 1%, to 24,415.84.

The import duties threaten to drive up prices for American consumers and companies and are likely to heighten uncertainty for businesses and investors around the globe.

US commerce Secretary Wilbur Ross said the tariffs – 25% on imported steel, 10% on aluminium – would take effect today.

President Trump had originally imposed the tariffs in March, saying a reliance on imported metals threatened national security. But he exempted Canada, Mexico and the European Union to buy time for negotiations – a reprieve that expired at midnight on Thursday.

Mr Fox has previously spoken of prioritising a trade deal with Mr Trump once the UK left the EU customs unions.

Ms Todd said: “A potential trade war reveals a great Brexit paradox: leaving the world’s most powerful free trade bloc and prioritising a deal with perhaps the West’s most protectionist leader was never going to end well. “Licking the shoes and praising the coiffured hair of Trump, it seems, was a colossal waste of time. Today shows the total and complete failure of Liam Fox and his policy agenda, he is about as useful as a chocolate fireguard. “Raising barriers brings around suspicion and even economic disaster. Trump should change his slogan to ‘Make America 1929 again’. “This government need to stop lying to the country about how strong a Brexit Britain would be and fess up to the fact that until March 29, 2019 we can decide to stay and lead in the EU. The government should be brave enough to put those options to the people.”

Other countries, including Japan, America’s closest ally in Asia, are already paying the tariffs.

The administration’s actions have drawn fire from Europe, Canada and Mexico and promises to quickly retaliate against US exports.

“This is protectionism, pure and simple,” said Jean-Claude Juncker, president of the European Commission.

French president Emmanuel Macron called the US decision to levy tariffs on the European Union “illegal” and a “mistake”.

He ominously recalled the pre-Second World War period saying, “Economic nationalism leads to war. This is exactly what happened in the 1930s.”

The EU earlier threatened to counterpunch by targeting US products, including Kentucky bourbon, blue jeans and motorcycles.

David O’Sullivan, the EU’s ambassador in Washington, said the retaliation will probably be announced in late June.

Former trade minister Francis Maude, now Lord Maude of Horsham, condemned the tariffs as “stupid and counterproductive”.

The Tory peer, speaking on the Today programme, urged the government and the EU not to embark on a “tit-for-tat” policy and instead stick “robustly to free trade”.

He said: “I think the proper reaction is first of all to say this is stupid, it’s counterproductive, that any government that embarks on a protectionist path inflicts the most damage on itself.

“The inevitable result of putting these tariffs on imports will be to increase prices on consumer goods for its own citizens.”

He added: “You can’t have this thing that we see them doing something that’s stupid and unreasonable and therefore we do something stupid and unreasonable ourselves.”

Mexico complained that the tariffs will “distort international trade” and said it will penalize US imports including pork, apples, grapes, cheeses and flat steel.

In Canada, Prime Minister Justin Trudeau said: “These tariffs are totally unacceptable.”

Canada announced plans to slap tariffs on $12.8bn-worth (£9.65bn) of US products, ranging from steel to yogurt and toilet paper.

“Canada is a secure supplier of aluminium and steel to the US defence industry, putting aluminium in American planes and steel in American tanks,” Mr Trudeau said.

“That Canada could be considered a national security threat to the United States is inconceivable.”

Mr Trump had campaigned for president on a promise to crack down on trading partners that he said exploited poorly negotiated trade agreements to run up big trade surpluses with the US.

The US tariffs coincide with – and could complicate – the Trump administration’s separate fight over Beijing’s strong-arm tactics to overtake US technological supremacy.

Mr Ross is leaving on Friday for Beijing for talks aimed at preventing a trade war with China.

The world’s two biggest economies have threatened to impose tariffs on up to 200bn-worth (£150bn) of each other’s products.

The steel and aluminum tariffs could also complicate the administration’s efforts to renegotiate the North American Free Trade Agreement (Nafta) with Canada and Mexico, a pact that Mr Trump has condemned as a job-killing “disaster”.

The White House released a statement from Mr Trump on Thursday night saying of Nafta, “Earlier today, this message was conveyed to Prime Minister Justin Trudeau of Canada: The United State (sic) will agree to a fair deal, or there will be no deal at all.”

Mr Trump had offered the two US neighbours a permanent exemption from the steel and aluminium tariffs if they agreed to US demands on Nafta. But the Nafta talks stalled.

Mr Ross said there was “no longer a very precise date when they may be concluded”, and that as a result, Canada and Mexico were added to the list of countries hit with tariffs.

Likewise, the Trump trade team sought to use the tariff threat to pressure Europe into reducing barriers to US products. But the two sides could not reach an agreement.

The import duties will give a boost to American makers of steel and aluminum by making foreign metals more expensive. But companies in the US that use imported steel will face higher costs.

And the tariffs will allow domestic steel and aluminum producers to raise prices, squeezing companies – from car makers to can producers – that buy those metals.