US tariffs of 25% on steel and aluminium imports have kicked in ending all country exemptions to the levies.
The move is likely to escalate tensions with some of America's largest trading partners.
The European Union will impose tariffs on €26 billion worth of US goods from next month in response to the tariffs, the European Commission said in a statement today.
Yesterday, President Trump threatened and then backed down from a doubling of steel and aluminium tariffs on Canada to 50%, after Ontario suspended plans for a surcharge on exported electricity.
Speaking on Morning Ireland, the chief economist at Deloitte Ireland, Kate English, described the tariff wars as being all about who can absorb the most pain.
"It's certainly a period of where sentiment is much reduced, but more so, a feeling of there's going to be a lot of pain from this and almost a realisation that wasn't potentially previously there," said Ms English.
The economist said that tariff wars are all about who can absorb the most pain.
Stock market falls, tariffs and other changing policies are reigniting fear of economic downturn in the US and the "R" word has been making the rounds among traders and analysts.
A Reuters poll found 91% of economists view the odds of a downturn to have increased under the President's rapidly shifting trade policies.
Asked about the recent drop in stocks and fears of a coming recession, White House Press Secretary Karoline Leavitt said: "When it comes to the stock market, the numbers that we see today, the numbers we saw yesterday, the numbers we'll see tomorrow are a snapshot of a moment in time".
"The US is in a period of economic transition", she said.
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Today, President Trump is hosting the Taoiseach for a meeting at the White House, amid concerns tariffs could pose a significant risk to the Irish economy.
The sector that is most exposed in Ireland is pharmaceuticals, according to Ms English, as this is where the majority of our exports to the US are weighted in.
"They account for almost 17% of our overall exports and an even much higher percentage of our exports to the states as a whole," she said.
"And again this goes back to this question of will tariffs be targeted towards certain sectors or will they be a blanket-plan approach, because that's what kind of differentiates this time round to last time around," she added.
