The European Union will announce retaliatory measures following US decision to impose steel and aluminium tariffs.

The European Union (EU) will impose “counter-balancing measures” after the United States announced tariffs on steel and aluminium imports from the Canada, Mexico and the EU, the European Commission chief said.

The tariffs, which take effect from midnight on Friday, will end a two-month exemption for the key US allies.

They include a 25 percent tariff on steel imports and a 10 percent tariff on aluminium imports.

During a speech in Brussels, Jean-Claude Juncker, president of the European Commission, promised to announce retaliatory sanctions later on Thursday.

“This is a bad day for world trade,” he said. “We will immediately introduce a settlement dispute with the World Trade Organisation (WTO) and will announce counterbalancing measures in the coming hours,” he added.

“It is totally unacceptable that a country is imposing unilateral measures when it comes to world trade.”

German Chancellor Angela Merkel said the EU response will be “intelligent, decisive and joint”, adding that the tariffs are incompatible with WTO rules.

France’s President Emmanuel Macron spoke forcefully against the tariffs, calling them “illegal” and a “mistake”.

He said he will speak with US President Donald Trump on Thursday evening, warning that the move could close the door on other talks.

On Twitter, Manfred Weber, the leader of the European People’s Party in the European Parliament said Europe had “no choice” but to defend itself.

“We will not accept this highly regrettable decision without reacting,” he said.

Europe does not want a trade conflict. But if @realDonaldTrump decides to treat Europe as an enemy, we will have no choice but to defend European industry, jobs & interests. We will not accept this highly regrettable decision without reacting. #trade #tariffs 1/2 — Manfred Weber (@ManfredWeber) May 31, 2018

Canada echoed the condemnation, with Prime Minister Justin Trudeau slamming the tariffs as “totally unacceptable”.

“We have to believe that at some point common sense will prevail,” he said at a news conference.

“Unfortunately, the actions taken today by the American government do not seem to be headed in that direction”.

Foreign Minister Chrystia Freeland has promised retaliatory measures worth $12.8bn against US steel, aluminium and other US exports including whiskey and orange juice.

Following the US announcement, Freeland said Canada would challenge the US moves under both WTO and NAFTA rules.

US Commerce Secretary Wilbur Ross, who announced the tariffs, said in an interview on Thursday that any retaliatory measures are unlikely to have much effect on the US economy.

Mexico also announced retaliatory tariffs on US imports including pork bellies, apples, grapes, cheese and flat steel, according to a statement from Mexico’s Economy Ministry.

The statement criticised the US use of a national security justification as “improper” and said the tariffs will affect key US industries, including the automotive, aerospace and electronics sectors.

Foreign Minister Luis Videgaray Caso said Mexico was committed to NAFTA negotiations despite the “unjust” tariff measures, but it is unclear how the move will affect the ongoing NAFTA talks.

Ross said there was no set date for the talks to be concluded and so Canada and Mexico were added to the list of “those who will bear tariffs”.

According to the US Commerce Department, Brazil, Argentina and Australia have agreed to limit steel shipments to the US in exchange for avoiding tariffs. Tariffs will remain on imports from Japan.

He added that he believes the relationship between the US and the affected allies will not be affected in the long-term and that the allies “will get over this in due course”.

Christine Lagarde, the managing director of the International Monetory Fund (IMF) said the poorest will suffer most from trade conflicts.

Susan Danger, CEO of the American Chamber of Commerce to the EU said US companies based in Europe were opposed to the move and are “very concerned” about the impact of potential retaliatory measures.