Donald Trump has announced steep tariffs on steel and aluminium imports, sparking an immediate threat of "countermeasures" from Europe and sending Wall Street plunging.
The Dow Jones Industrial Average dived by more than 500 points as the move stoked fears of a global trade war and higher costs for US manufacturers.
Mr 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 announcement of plans for a 25% tariff on steel imports and a 10% levy on aluminium came despite apparent internal White House wrangling over the strategy.
Mr 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
European Commission president Jean-Claude Juncker reacted strongly against the measures, saying the move appeared to be a "blatant intervention to protect US industry" and "could only aggravate matters".
He said the EC would bring forward in the next few days "countermeasures against the US to rebalance the situation".
"We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk," Mr Juncker said.
Shares in American steel makers rose but manufacturers such as Boeing fell on fears their costs would be hit by the decision, helping drive the wider stock market sharply lower.
Fears have been expressed that the beleaguered British steel industry – which has been emerging from a crisis in recent years which cost it thousands of jobs – could be hit by the tariffs.
Those problems in the UK largely resulted from increased global production, especially in China, driving down prices – the same issue that has hit US industry and been described by the country's commerce department as a national security threat.
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.
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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.