U.S. doubles tariffs on steel and aluminum to 50%

The United States doubled its steel and aluminum tariffs to 50% Wednesday, casting a pall on a gathering of OECD ministers as President Trump's intensifying trade war weighs on the world economy. The boosted levies went into effect at midnight EDT.

Mr. Trump's sweeping tariffs on allies and adversaries alike -- including ones on imported steel and autos -- have strained U.S. ties with trading partners and sparked a flurry of negotiations to avoid the duties.

And the pressure is mounting as the Organization for Economic Cooperation and Development (OECD), a 38-nation grouping of mostly developed countries, cut its global growth forecast on the back of the Trump levies.

Trade, consumption and investment have been affected by the tariffs, OECD chief economist Alvaro Pereira earlier told AFP, warning that the U.S. economy will see the biggest repercussions.

While some of Mr. Trump's most sweeping levies face legal challenges, they've been allowed to remain in place for now as an appeals process proceeds.

Against that tense backdrop, the Paris-based grouping is holding a ministerial meeting that started Tuesday and continued into Wednesday.

U.S. trade representative Jamieson Greer and European Union trade commissioner Maros Sefcovic were set to hold talks on the sidelines of the gathering, with the bloc seeking to stave off higher levies on its nations.

Similarly, U.K. Trade Secretary Jonathan Reynolds met with Greer Tuesday to try to avert the tariff hikes on steel and aluminum.

Despite the doubling of those tariffs, imports from the U.K. will remain at 25 percent for now while both sides work out duties and quotas in line with the terms of their recently-announced trade pact.

In their talks, Reynolds and Greer discussed a "shared desire to implement" the pact, including agreements on sectoral tariffs, as soon as possible, a U.K. readout said.

But Mr. Trump's latest salvo raises tension with various partners.

The EU has said it "strongly regrets" Mr. Trump's plan to raise metals tariffs, cautioning that it "undermines ongoing efforts to reach a negotiated solution" with the U.S. The bloc added that it was ready to retaliate.

Canada, the largest supplier of steel and aluminum to the U.S., has called Mr. Trump's tariffs "illegal and unjustified."

The Group of Seven advanced economies -- Britain, Canada, France, Germany, Italy, Japan and the U.S. -- is due to hold separate talks on trade on Wednesday.

"We need to come up with negotiated solutions as quickly as possible, because time is running out," German economy minister Katherina Reiche said Tuesday on the sidelines of OECD talks.

French trade minister Laurent Saint-Martin added, "We have to keep our cool and always show that the introduction of these tariffs is in no one's interest."

Mexico will request an exemption from the higher tariff, Economy Minister Marcelo Ebrard said, arguing that it's unfair because the United States exports more steel to Mexico than it imports. "It makes no sense to put a tariff on a product in which you have a surplus," Ebrard said.

Mexico is highly vulnerable to Mr. Trump's trade wars because 80 percent of its exports go to the U.S., its main trading partner.

On Tuesday, White House press secretary Karoline Leavitt confirmed the Trump administration sent letters to trading partners to push for offers by Wednesday as a deadline approached.

Besides imposing 10 percent tariffs on almost all U.S. trading partners in early April, Mr. Trump had announced higher rates for dozens of economies including the EU and Japan as he sought to pressure countries to correct practices Washington deemed unfair.

Those higher rates were paused for 90 days, but the halt is due to expire July 9.

All eyes are also on rising tension around trade between Washington and Beijing.

Mr. Trump has taken special aim at China this year, at one point imposing additional levies of 145 percent on Chinese imports andtriggering Beijing's counter tariffs of 125 percent on U.S. goods.

Both sides agreed to temporarily de-escalate in May, but Mr. Trump accused China of violating the deal.

Early Wednesday, Mr. Trump said on his Truth Social outlet that, "I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!"

The issue was China "slow-walking the approval" of critical mineral exports and rare earth magnets, U.S. Deputy Treasury Secretary Michael Faulkender told CNBC on Monday. But he maintained that Washington is making "good progress" overall in talks.