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Washington — President Donald Trump declared Thursday the U.S. would impose stiff 25 percent tariffs on foreign steel and 10 percent tariffs on foreign aluminum in a move that prompted retaliatory threats from foreign governments and rattled financial markets.

The Dow Jones industrial average fell 420.22 points, or 1.7 percent, over concerns that other countries would retaliate with barriers that would hurt the global economy and harm profits for U.S. manufacturers. Stocks of domestic carmakers were hit especially hard as the auto industry warned such tariffs would increase the price of cars in an already sluggish market.

Chrystia Freeland, Canada’s Minister of Foreign Affairs, responded to the pronouncement from Trump with the statement, “Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers.”

Jean-Claude Juncker, president of the European Commission, also promised it would retaliate if Trump follows through with the tariff threat.

Shares of General Motors Co. fell 4 percent on Thursday; Ford Motor Co. closed down 3 percent; Fiat Chrysler Automobiles fell 2.8 percent.

Automakers, including GM, had warned that such tariffs could harm the industry.

GM said in a statement Thursday that it purchases more than 90 percent of its steel for U.S. production from domestic suppliers.

“We need to better understand the details around the announcement today, but the bottom line is we support trade policies that enable U.S. manufacturers to win and grow jobs in the U.S, and at the same time succeed in global markets,” the company said.

In announcing the decision to impose the tariffs, Trump, who campaigned on protectionist trade policies, endorsed a recommendation by Commerce Secretary Wilbur Ross that called for tariffs of at least 24 percent on steel imports and 7.7 percent on aluminum.

Trump said Thursday in a meeting at the White House with steel and aluminum industry representatives that he was imposing the tariffs because U.S. companies have been “very unfairly treated by bad policy, by bad trade deals, by other countries.

“They’ve been horribly treated by other countries, and they have not been properly represented,” he said. “More importantly, because of that, workers in our country have not been properly represented.”

Trump told the executives, “We’ll probably see you sometime next week. We’ll be signing it in. And you’ll have protection for a long time in a while, and you have to regrow your industries, that’s all I’m asking.”

Cody Lusk, president of the American International Automobile Dealers Association, which lobbies for foreign-based automobile franchises in Washington, said Trump’s proposed tariffs “couldn’t come at a worse time,” noting that increased tariffs will likely result in higher car prices at a time when domestic auto sales have already been sluggish.

“Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America,” Lusk said in a statement. “The burden of these tariffs, as always, will be passed on to the American consumer. Car shoppers looking for a deal will instead find that they are paying a new tax to transport themselves and their families.”

John Bozzella, CEO of the Association of Global Automakers which represents foreign-based manufacturers, added: “With one stroke of the pen, much of the promised benefit of tax reform and other administration initiatives aimed at reviving manufacturing and protecting national security could be undercut.”

And the National Retail Federation, which represents U.S. retailers, issued a statement saying, “Make no mistake, this is a tax on American families. When costs of raw materials like steel and aluminum are artificially driven up, all Americans ultimately foot the bill in the form of higher prices for everything from canned goods to automobiles.”

The reaction was notably different from the U.S. steel industry.

“We support and commend President Trump for announcing today the actions he plans to take to stem the tide of unfairly traded steel imports that threaten the national security of our country,” AK Steel CEO Roger K. Newport said in a statement. “This is a strong, important step to combat the effects of global steel overcapacity and address actions by other countries to circumvent U.S. trade laws and orders designed to ensure a level playing field.”

AK Steel has a factory in Dearborn near the Detroit border.

Shares of AK Steel soared Thursday, closing up 9.5 percent. U.S. Steel stocks were up 5.8 percent. Aluminum company stocks also rose on the news, with Century Aluminum gaining 7.5 percent.

Thomas Gibson, president and CEO of the American Iron and Steel Institute, also thanked Trump.

“About one-fourth of domestic steel capacity today is not being utilized,” he said. “This is fueled by the massive excess steel capacity in the world today. ... That translates into idled plants and the loss of thousands of jobs.”

klaing@detroitnews.com

(202) 662-8735

Twitter: @Keith_Laing

Staff writer Ian Thibodeau contributed.

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