Countries gear up to build strategies amid tariff tensions

BRUSSELS — With his small steel mill facing hefty US tariffs, Canadian businessman Chris Wyatt is hunting for new European customers at the world's biggest industrial technology fair in Germany.

"There's uncertainty in the markets, so big projects are being shelved or they're just not moving ahead," said sales director Wyatt, handing out flyers at his stand, alongside big players in robotics and factory machinery.

This week's Hannover Messe, a fair that has attracted more than 4,000 exhibitors from around 60 countries, takes place as US President Donald Trump gears up to announce a wave of "reciprocal tariffs", ratcheting up global trade tensions even further.

This year's guest of honor is Canada, a clear signal that Europe stands with Ottawa as it faces hefty duties from the United States, its largest trading partner.

"Welcome to Germany, dear Canadian friends," German outgoing Chancellor Olaf Scholz said on Sunday ahead of the fair's opening. "We stand by your side."

His comments highlighted warming ties between Europe and Canada amid the trade tensions with the US.

Trading partners from the European Union to Canada and Mexico have vowed to respond with retaliatory tariffs and other countermeasures, even as some have sought to negotiate with the White House.

A top EU official warned the US on Tuesday that the world's biggest trade bloc "holds a lot of cards" when it comes to dealing with the new tariffs and has a good plan to retaliate if forced to.

"Europe has not started this confrontation. We do not necessarily want to retaliate, but if it is necessary, we have a strong plan to retaliate and we will use it," European Commission President Ursula von der Leyen told EU lawmakers.

The commission, the EU's executive branch, negotiates trade deals on behalf of the bloc's 27 member countries and manages trade disputes on their behalf.

"Europe holds a lot of cards, from trade to technology to the size of our market. But this strength is also built on our readiness to take firm countermeasures if necessary. All instruments are on the table," von der Leyen said at a European Parliament session in Strasbourg, France.

Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum spoke on Tuesday about Canada's plan to "fight unjustified trade actions" by the US, Carney's office said.

'Buy Canadian'

US companies say a "Buy Canadian" movement is already making it harder for their products to reach that country's shelves.

The Brazilian government on Tuesday welcomed its Senate's push to advance the Reciprocity Bill, which would authorize tariff countermeasures against the United States, but emphasized that its preferred path remains dialogue and economic cooperation.

Speaking to reporters, Brazilian Vice-President Geraldo Alckmin applauded the Senate's effort to provide a legal framework for trade defense.

"Brazil wants to grow its commerce through reciprocity grounded in competitiveness," he said.

"But I must stress that the way forward is dialogue and economic complementarity. We could even expand into new partnerships," said the vice-president.

The Brazilian Senate's Economic Affairs Committee approved the bill earlier on Tuesday with 16 votes in favor and none against. The legislation would allow Brazil to apply reciprocal tariffs and environmental standards in response to foreign trade restrictions.

In response to additional US tariffs on automobiles, Japanese Prime Minister Shigeru Ishiba pledged on Tuesday to provide financing and procurement support to domestic companies.

During a news conference, Ishiba said if the US implements a 25 percent tariff on car imports, the government will set up designated consultation offices in about 1,000 locations across Japan to meet the funding needs of affected companies.

"Japan is the largest investor in the US," Ishiba said, noting his government will continue urging the US to exempt export-reliant Japan from additional tariffs on automobiles and other products.

Agencies - Xinhua