It is unclear if the plan would apply worldwide or just to major world players
Donald Trump has sparked anger amongst US trading partners after he announced plans to impose hefty tariffs on steel and aluminium imports.
The announcement by the US President sparked an immediate threat of "countermeasures" from Europe and sent world stock markets plunging amid fears of a global trade war and higher costs for US manufacturers.
President Trump said it was in response to decades of "disgraceful" unfair trade policies - after the US steel industry suffered from cheap Chinese steel coming on to the market, driving down prices.
The President did not specify whether his plan would apply worldwide or just to major world players such as China and India but it was enough for European partners to threaten a response.
In a tweet on Friday morning, President Trump claimed: "When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win."
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!— Donald J. Trump (@realDonaldTrump) March 2, 2018
The announcement of proposals for a 25% tariff on steel imports and a 10% levy on aluminium came despite apparent internal White House wrangling over the strategy.
Prsident Trump summoned US industry executives on Thursday and told them: "What's been allowed to go on for decades is disgraceful.
"You will have protection for the first time in a long while and you're going to regrow your industries.
"We're going to build our steel industry back and our aluminium industry back."
Mr Trump had earlier tweeted that many US industries had been "decimated by decades of unfair trade and bad policy."
Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!— Donald J. Trump (@realDonaldTrump) March 1, 2018
The European Commission president Jean-Claude Juncker reacted strongly against the threat, saying the move appeared to be a "blatant intervention to protect US industry" and "could only aggravate matters".
Shares in American steel makers rose in response to the tariff announcement but manufacturers such as Boeing fell on fears their costs would be hit by the decision, helping drive the wider stock market sharply lower.
The Dow Jones closed 1.7% down while Asian markets later followed suit with Japan's Nikkei shedding 2.2%.
China's main Shanghai Composite was just 0.5% lower. The FTSE 100 followed the risk-off mood by falling 0.3% on opening.
Imposing the tariffs is likely to escalate tensions with China and other trading partners, and critics fear they will retaliate with trade penalties of their own.
China has already threatened to curb imports of US soybeans in retaliation while the European Union has said it will consider action as well.
Senator Pat Roberts, who chairs the Senate's agriculture committee, said: "Every time you do this, you get a retaliation."
US car makers and other companies that use steel or aluminium could also be hit, as the tariffs would push up their costs.