US President Donald Trump appeared to declare an all-out trade war against the EU and China late last week when he announced punishing steel and aluminium tariffs despite fierce opposition from within the administration who argued that the move would ultimately damage US industry by unilaterally cutting itself off from its two of its biggest customers.

Having broken with his own economic advisers and after declaring that “trade wars were good” Trump announced during a meeting with representatives of US business, tariffs on 25% on steel products and 10% on aluminum, materials that are the lifeblood of the American construction and manufacturing sectors as the US annually imports over $1.3 billion-worth of steel and aluminum products from the EU, Canada, and South Korea.

“We’re going to be instituting tariffs next week,” Trump said while also threatening to impose harsh tariffs on EU-made automobiles. “They (the tariffs) will be in place for a long period of time.”

Apart from the consequences in China and Europe, where officials have already warned of crippling countermeasures, the move will severely impact producers in South Korea and Canada, two of the US’ closest allies and largest trade partners.

Canadian Prime Minister Justin Trudeau said the new tariffs would cause a major disruption to cargo traffic both sides of the border, and reiterated that Ottawa would “continue to defend Canadian industry”.

The timing of the announcement will be seen as especially provocative in China, coming just as Liu He, Vice Chairman of Beijing’s National Development and Reform Commission and a powerful member of the Politburo of the Communist Party of China will be visiting Washington. Liu is believed to be the most likely candidate to chair China’s central bank – owners of $1.189 trillion, as of October 2017.

The EU “will react firmly” to defend its interests against US trade tariffs on steel and aluminium, European Commission chief Jean-Claude Juncker said shortly after Trump’s announcement.

“In the next few days, the Commission will bring forward a proposal for WTO-compatible countermeasures against the US to rebalance the situation,” Juncker said in a statement, referring to the World Trade Organisation, adding that Trump’s new tariffs are “a blatant intervention to protect US domestic industry, completely unrelated to any national security justification”.

“Instead of providing a solution, this will only aggravate matters,” said the Berlaymont head, adding that the EU should not be expected to “sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk.”

Cecilia Malmström, the Swedish-born European Commissioner for Trade, said she expects the EU will look into filing a motion against the US in Geneva at the earliest opportunity.

The global stock markets once again took a beating on March 2 after Trump announced his support for starting a major trade war. Japan’s Nikkei index fell 2.4%, Hong Kong’s HKEX and the KRX South Korea dropped by 1.6% percentage points.

Asian steelmakers also took a hit, South Korea’s Posco falling 3% and Japan’s Nippon Steel plummeting by 4%.

In Europe, the UK’s blue chips index has hit by a sudden three-week low. London’s FTSE 100 lost 42 points, or 0.5%, at the start of trading, while Germany’s DAX lost 1%, sliding to its lowest level in 6 months, down 4% within the week and down 12% from its peak just over a month ago. France’s CAC has shed 0.75% as traders on both sides of the Atlantic worry that a deepening trade war could have serious long-term effects on the global markets.

While European and Asian markets cratered, White House spokeswoman Sarah Huckabee Sanders was quick to point out that Trump was unconcerned about the stock market decline, saying the “president is still focused on long-term economic fundamentals”.

Trump’s decision to add Imposing restrictions on EU steel and aluminium exports has sparked widespread condemnation across the European Union, with MEPs from the International Trade Committee MEPs saying a swift and equally proportional response by Brussels is fully justified.

“The International Trade Committee strongly condemns the announcement by the President of the United States to impose restrictions on imports of steel and aluminium to the US in the form of additional import duties”, committee chairs said in a statement on Friday.

Bernd Lange and Alessia Maria Mosca for the Socialists and Democrats, Godelieve Quisthoudt-Rowohl for the European Peoples’ Party, Emma McClarkin for the European Conservatives and Reformists, Marietje Schaake for the Alliance of Liberals and Democrats for Europe, Helmut Scholz for the United Left–Nordic Green Left, and Yannick Jadot for Greens/European Free Alliance, said Trump’s measure is unacceptable and incompatible with WTO law, suggesting that “US trade protectionism will isolate our strategic partner and instead of creating growth and jobs, we will have exactly the opposite effect. We deeply regret this step.”

Both Juncker and Malmström by MEPs for standing firm in their call for an immediate response to Trump’s announcement and for their move to introduce WTO-compatible countermeasures against the United States.

Trump’s announcement that he was ready to declare a trade war on key partners was followed at the weekend by his unprecedented praise for a decision by Chinese President Xi Jinping to remain in power for life. The authoritarian Xi, who has been in power since 2012, is expected to wield his executive authority at an annual Communist Party congress to abolish presidential term limits by changing the Chinese constitution. The move would essentially grant Xi the same powers as the Peoples’ Republic of China founder and dictator, Mao Zedong.

“He’s (Xi) now president for life. President for life. And he’s great,” Trump told Republican donors at a fundraising event held at his Florida resort, Mar-a-Lago. “And look, he was able to do that. I think it’s great. Maybe we’ll give that a shot someday.”