U.S. President Donald Trump on Friday insisted "trade wars are good, and easy to win," a bold claim that is already finding opposition among trading countries.

Trump has declared the U.S. will impose punishing tariffs on steel and aluminum imports, escalating tensions with China and other trading partners and raising the prospect of higher prices for American consumers and companies.

The move was aimed at China, which supplies a small amount of steel for the U.S. market. Canada is the No. 1 supplier of steel, with more than four million tonnes a year, or just over a sixth of all the steel that the U.S. buys from the rest of the world.

In aluminum, Canada's influence is even greater, supplying more than 40 per cent of American imports.

Trump's declaration Thursday gave no indication that Canada will be exempt from the tariffs, but Ottawa's response was swift, and firm.

"Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers," the government said in a statement Thursday.

Despite the hue and cry over the news, the president defended himself on Twitter early Friday morning

He later added: "Our steel industry is in bad shape. IF YOU DON'T HAVE STEEL, YOU DON'T HAVE A COUNTRY!"

That has kicked off a flurry of fears that the rest of the world will respond in kind to U.S. exports, which would grind the global economy to a halt as protectionism washes over the gears of trade.

As Bank of Montreal economist Sal Guatieri put it, "The tariff will only fan concerns about inflation and interest rates, while also undercutting U.S. growth if spending power takes a hit and other nations retaliate."

"While Donald Trump considers himself pro-business, the imposition of tariffs across the aluminum and steel sector has led to fears over a collapse in global trade," said Joshua Mahony, market analyst at IG.

Trump's words brought a stinging rebuke from the president of the European Commission, Jean-Claude Juncker, who denounced his plan as "a blatant intervention to protect U.S. domestic industry." Juncker said the EU would take retaliatory action if Trump followed through.

While not immediately offering a specific response on what it would do, the Chinese Commerce Ministry statement said: "The Chinese side expresses grave concern." The ministry said Beijing has satisfied its trade obligations and appealed to Washington to settle disputes through negotiation.

Beijing faces mounting complaints from Washington, Europe and other trading partners that it improperly subsidizes exports and hampers access to its markets in violation of its free-trade commitments. China is far and away the world's largest producer of steel, but little of it makes it directly to U.S. shores.

Trump, who has long railed against what he deems unfair trade practices by China and others, summoned steel and aluminum executives to the White House and said next week he would levy penalties of 25 per cent on imported steel and 10 per cent on aluminum imports.

Even the announcement itself was thrown into doubt for a time because of internal divisions at the White House. The actual event caught some top officials off guard and left aides scrambling for details. Key Senate offices also did not receive advance notice.

White House press secretary Sarah Huckabee Sanders said the decision "shouldn't come as a surprise to anyone," noting the president had been talking about it "for decades." On Friday, she told reporters that Trump wasn't concerned about the day's market decline, adding the "president is still focused on long-term economic fundamentals."

In the short term, Trump's move will likely raise steel and aluminum prices in the U.S.

"Domestic U.S. steel prices have already risen by 20 per cent since the start the year in anticipation of protectionist measures," Andrew Hunter of Capital Economics said in a note to clients Thursday.

That's all well and good for U.S. steel and aluminum companies, but bad for any manufacturer that uses those products, and the move is causing red flags to be waved from industries ranging from tool and die makers to beer distributors to manufacturers of air conditioners. The American International Automobile Dealers Association warned it would drive prices up "substantially."

"This is going to have fallout on our downstream suppliers, particularly in the automotive, machinery and aircraft sectors," said Wendy Cutler, a former U.S. trade official who is now vice-president of the Asia Society Policy Institute. "What benefits one industry can hurt another. What saves one job can jeopardize another."

The move seems to be already costing the U.S. economy some foreign investment. Swedish appliance maker Electrolux on Friday said it was shelving its plans to expand and modernize a plant in Tennessee because of the steel move.

Electrolux says it buys all of the steel it uses in the U.S. inside the country, but the tariff move has the potential to push up prices, so "We are putting it on hold," spokesman Daniel Frykholm said. "We believe that tariffs could cause a pretty significant increase in the price of steel on the U.S. market."

Steel-consuming companies said steel tariffs imposed in 2002 by President George W. Bush ended up wiping out 200,000 U.S. jobs. They were eventually overturned as they went against WTO rules.

Some of those prices will spill over the border into Canada too, trade lawyer Mark Warner said in an interview with CBC News.

"We'll see it on the price of cars because cars are an integrated product," Warner said.

He said the move is likely more aimed at his voting base, so he can perceive to be doing something on the trade front.

"For Trump, the big picture is getting jobs back into the U.S, and being seen to be active on trade. That's why he's gone after steel and aluminum."

The penalties were pushed by Commerce Secretary Wilbur Ross and White House trade adviser Peter Navarro, an economist who has favoured taking aggressive action against China and other nations on trade issues.

But Warner is convinced that despite the controversy, the reality of any new trade rules is likely to be much less harsh that what was suggested on Thursday.

"I'm not sure that it's done yet because I'm never sure with Trump," Warner said. "Let's see the fine print."