[ferro-alloys.com]The European Union introduced retaliatory measures on US products Friday, prompting President Donald Trump to suggest he would put a tariff on European auto imports.

The EU measures come as a response to US tariffs on steel and aluminum, which the US imposed on European metal June 1. Initially, the EU, along with Canada and Mexico, had been exempted.

The EU measures target a list of US products worth Eur2.8 billion ($3.2 billion), ranging from steel and aluminum products to agricultural goods. EU Trade Commissioner Cecilia Malmstrom said she was "left with no other choice" but to introduce tariffs.

"If these tariffs and barriers are not soon broken down and removed, we will be placing a 20% tariff on all of their cars coming into the US," Trump tweeted early Friday.

US AUTO TARIFFS WOULD HARM EUROPEAN STEEL: EUROFER, VW STAHL

Trump's tweet comes as the US Department of Commerce is in the middle of its Section 232 investigation into imports of automobiles and automotive parts. The investigation, launched May 24, aims to determine if imports of these goods threaten national security, and could result in tariffs, duties, or other measures.

On June 20, Commerce Secretary Wilbur Ross said no recommendations have been issued yet as the investigation is still ongoing.

The German steel federation WV Stahl told S&P Global Platts when the investigation was announced last month that the German steel industry -- Europe's biggest producer of steel -- would be heavily affected by tariffs.

"Limitations in the business with automotive would be a significant danger for the German steel industry as 25% of steel demand is allocated for that sector," a WV Stahl official said.

According to WV Stahl, Germany exports 1.3 million mt of rolled steel in cars or car parts to the US per year, equaling the direct steel exports to the US.

Trump's tweet only further exacerbated uncertainty in steel markets. European steel federation Eurofer told Platts Friday: "The impact could be severe. Indeed, the steel industry would now be hit twice: once by the direct tariffs on steel, and again by the indirect effect of US tariffs on EU cars reducing the number produced with EU steel and then exported to the US."

Around 19% of European steel is used for car production, Eurofer said. According to the European Automobile Manufacturers' Association, the European Union exported 1.16 million cars to the US in 2017.

German car manufacturer Daimler was the first company to put out a profit warning as the parent company of Mercedes expects to be impacted by current trade tensions.

• [Editor:王可]