from berlin. on the eve of the trade war . tomorrow, the united states plans to slap tariffs on exports from the european union. they will target aluminum and steel. and come despite two months of negotiations. the eu promising to hit back with tariffs on american goods. we will go live to washington and brussels for more on this transatlantic tit-for-tat. also coming up, he is back. the e man to be italy's new prie minister, is taking the post

after all. the two main populist parties have reached an agreement on a new government, and it means that just that they contact could be sworn -- it means just that they could be sworn in by the positive -- by the president on friday. and zinedine zidane quits, days after leading his team to a league title. he says his job is done and he can walk away with his head held health -- high. ♪ brent: i'm brent goff. it is good to have you with us. a trade war is about to begin between two economies that are supposed to be the world's closest allies. tomorrow, the united states is imposing tariffs on steel and aluminum from the european union. it is doing the same to canada and mexico.

the last ditch negotiations in paris this week failed to reach negotiations. and now europe is vowing to retaliate with tariffs against u.s. products. angela merkel today calling the u.s. tariffs illegal, and warning that this could spiral into a global trade war. reporter: it is the moment that european steel producers were dreading, they were hoping that they would be exempt from tariffs. europeans export millions of tons of steel to the u.s. every year. one thing is certain, starting on friday the u.s. will impose tariffs of 25% on steel, and 1 % on aluminum. canada and mexico have also not been spared. >> other countries, which are now excluded from the u.s. steel market, will look for new markets. and what lies more closely than the open european market? so we expect a deflection of

trade from countries such as turkey, or iran, coming toward the european union. reporter: the economic minister is disappointed as well in germany. >> todayay's decision by thu.u.. governrnnt is wrong. it is harmful for europe, as well as the united states. reporter: the eu is already preparing retaliatory measures. >> this is a bad day for the world. the european union cannot react to that without any kikind of reaction, so we will immediately inintroduce a settlement dispute on the wto. reporter: the year considering -- and the european union is considering duties on motorcycles, bourbon, cranberries and origin -- or just. mexico and canada are also

contemplating countermeasures. brent: i am joined tonight by our correspondent clare richardson and georg mathis. clare, how has the commerce secretary from the u.s. defended the american decision to slap allies and its biggest trading partners with these tariffs? clare: wilbur ross tried to turn this on its head, saying european negotiators failed to convince washington not to extend an exemption to these tariffs. either another temporary one, or a more permanent solution. now w this comes after months of , anxiety about what the united states was going to do here. we saw personal lobbying efforts by the french president and german chancellor, angela merkel, who came to washington dc to try to convince donald trump not to impose the tariffs on the european union. obviously that has not worked , out. originally, when donald trump said that the tariffs were going to take place, he made the argument on a case of national

security. he said that it was a central -- essential for the united states to have aluminum and steel industries domestically because necessary to the united states' , defense. it appears that he is willing to burn bridges with the european allies, in order to back up those industries. those are often areas where he has a lot of domestic support politically. brent: you could argue that europe has a seen this coming all along. any shock tonight in brussels? georg: that is right, they have seen this coming. they have informed the wto, they have handed in legislation. but of course, tonight, you have this moment of shock that actually it is now clear that all the hard work, all the

dialogue, although last-minute efforts have been in vain. brent: people were still holding out for an 11th hour resolution. i mean, there were trade delegations meeting and trying to find a solution. clare: right. we really saw the lobbying efforts up until the last minute. we knew the temporary exemptions that the european union, canada and mexico had obtained after the tariffs were announced in march were set to expire at the end of the month, so we knew some kind of decision would be coming down today at the latest. it is interesting to note how how much cash note -- note how much this could hurt transatlantic ties between the united states and europe, at a time when the u.s. needs allies in so many foreign-policy challenges. we are looking down the barrel of a possible meeting between donald trump and the north korean leader kim jong un, confronting china on other issues, and they need a european partners to settle issues to try to find solutions to problems in the middle east. so it is interesting to see that the timing of this is sensitive,

even though this was the date they set for them to expire, it is an interesting moment for donald trump to go ahead and impose the tariffs, in any case. brent: we heard that the european union, germany and france, they have slammed the tariffs, calling them illegal. i mean that is tough talk, but at the end of the day, anything that they can really do about it? georg: the european union has a started a dispute settlement case. they are keen to stay within the legislation of the wto. and now, 20 days from now if all , member states give their thumbs up, this list of tariffs could be slapped on the u.s. and it takes 20 days, beforehand the wto has been notified, so this is in accordance with the regulations of the wto that this

now will take place. so they really stick to the rules here and they hope that the u.s. will understand that this is the channel on what basis they want to resolve this conflict. brent: because, they think with staying with the wto, that this cannot spiral into a global trade war, but from where you are sitting tonight, does the danger seem stronger than ever? georg: retaliate, not escalate, that is the policy of the european union. but if you take a look at the bigger picture you not only have the scenario of a tit-for-tat war. the spokesperson of the german chancellor said that there is, we were looking at potentially a cycle of escalation here that the u.s. has provoked, and the bigger picture tells you, we also have the situation of the iran nuclear deal that the u.s. has walked away from, so as the eu continues to trade with iran, this could have potential

counter tariffs coming from the u.s. there is a data protection law that the u.s. has called hidden trade barriers, so there is a whole set of things that could inflame this conflict. brent: our correspondent in brussels tonight, and clare richardson in washington. both of you, thank you. preparing for the financial fallout from all of this, helena is here with that angle. >> that was the sound of business ties hitting a low across the atlantic. the european union and mexico vowing to retaliate, canada has already followed through, all of this leading to fears of a trade war. wilbur ross making it sound like european leaders are blowing the whole situation out of proportion. take a listen. wilbur ross: the tariffs are a fraction of 1% on products. the beer, soft drink, and soup cans -- it is a fraction of a

penny on each of those. in terms of an automobile, it is also a fraction of 1%. for the economy overall, it is a very small fraction of 1%. remember, we are in an $18 trillion economy. helena: here with me to talk about this is a representative from the jfk institute, the free institution of berlin. owen, president trump invoked is seldom used section of trade law from the 1960's, allowing him to impose trade barriers when there is a threat to national security. was there any sign to that? owen: i thought canada, the european union, and mexico were all friendly countries. also, we are all in the same boat together, speaking about security. so it is clearly one of these

distant ideas of industrial policy, if you do not have something specific, then somehow you are less of a nation and a less sicker. but -- secure. but it is clearly a made up -- the only way he could get to do what he threatened to do. helena: it seems up scare, but wilbur ross saying not enough was done to reduce the trade deficit. we do have to acknowledge that it is very large. does he have a point? irwin: sometimes you can say there is that deficit. do we agree with the cause of the u.s. deficits are? economists are actually pretty much in agreement, it has to do with a macroeconomic in balance between domestic sources of saving and the attractiveness of investment. and it happens to be the case that those reasons have nothing to do with protectionism.

that what could end up being the case, everybody is poor and the trade imbalances remain. it is getting investment and is saving back into the line, which means the united states would have to start saving more. in particular, the large future deficits should be something that the u.s. congress should worry much more about. helena: those reasons aside, brussels has said it will retaliate. jeans, bourbon, whiskey, motorbikes. it also says it wants to take the case to the world trade organization. it is fair to say that president trump has shown disregard for such institutions. do think that this would be enough to force his hand? irwin: there is no silver bullet in dealing with this administration. so, these are symbolic actions. if the european union only was

buying something like soybeans, the way the chinese are buying them from the united states, that would be really leverage. harley davidsons, bourbon, this is all some bolick actions -- al symbolic actions, indicatating t could get worse, and an indication that europe does not wanted to get worse. the normal procedure, when there is a trade dispute, is to go to the wto. but forcing america to be outside and not inside is probably the right strategy. helena: retaliation, not escalation from the european union. irwin from the jfk institute in berlin, good to have you and your analysis. and our correspondent sophie joining us from wall street. sophie, the u.s. commerce secretary wilbur ross trying to play things down, but investors do not seem to be buying it. u.s. companies already taking a hit.

if we take a look at stocks, who is hardest hit right now? sophie: the american automakers, for example, are suffering because many of them are still importing auto-parts from the european union. so they are going to face higher costs, which eventually will lead it to american cars getting more expensive. then there are the food producers. they need aluminum for their cans. so they are facing higher costs and will have to charge higher prices, while european committee there's -- competitors can dodge the tariffs, because they can export them into north america. then the energy sector is going to be hit hard, as the demand for steel will stay the same, very probably. so the u.s. companies are going to have to cover it all, which sounds like a good thing, but these companies have not been able to work efficiently for lower prices, that is why the imports were flooding the market

in the first place. so a lot of potential losers here. helena: as we heard, a trade war will only hurt both sides. does donald trump think he can keep things from spiraling out of control, at the same time getting what he wants? sophie: i think he is making a calculation, and calculates the cost of tariffs through higher prices is less harmful than the competition with the eu, canada, china, and mexico. he is also trying to live up to campaign promises he made, especially to the voters in the rust belt and industrial companies. it may not make sense economically, especially as the trade deficit i is not necessary going to strength -- shrink with retaliation from so many different size. we heard mexico and canada, the u.s. one of able to export more. and literally everybody else has

been begging donald trump not to go there. people in his own party, the lobbyists, because they fear the tariffs will have the effect of tax hikes. hurting too many manufacturers. helena: sophie, thank you very much. over to you, as italy removes some uncertainty for now. brent: a little bit of progress to report. we are going to italy, the right wing league and the five-star movement say they have reached a deal to form a new government. it will be led by a law professor, who could be sworn in as early as tomorrow. it will be his second shot at becoming prime minister. lastly, he returned his mandate to the government after the president rejected his proposed economics minister. ok, for more on that, there we

go. we will go to philip, a journalist in rome who is covering the story tonight. good to see you. does this mean the end of the crisis is near? >> it does seem that way. it has b been a nailbiter for 88 days w with moments of real draa in the conflict between the two parties who won the elelection d ththe presidentnt's popolicy tod europe, and italy's contininued presence in the euro. so i think aftfter all the uncertainty and stress and wrangling, it is a relief to see a governmement being formed, evn ifif it is the two populist parties who caused considerable alarm all along. brent: what do you make of the new prime minister who could be sworn in tomorrow?

what can we e expect from him? >> well, he really is an unknown. he is not particularly well known, even in the academic world. and he has no political experience, whatsoever. but he is trusted by the five-star movement. and his role will be effectively that of a broker between the five-star and the league parties, two populist parties with very different agendas. so it will take considerable diplomatatic skills to keep them together. and certainly there is concern that if he is not seen as an authoritative figure and really able to knock heads together and demand respect, it will be adjusting to see how things work out for the government.

but he i is clearly an intelligt and educated man. and probably most people are wishing him well. brent: he certainly has a big job ahead of him, trying to bridge these two political extremes, these two opposites. if he spends all his time doing that, it begs the question who will actually be leading the government? it was going to be in charge? can we say that maybe the heads of the two parties will actually be calling the s shots? phphilip i t think that that is likely. neither of t them would back don and allolow the other r went tbe prime minister. anand they areoth goining to be deputy prime minister's, as well as occupying a very significant ministeriall role. one will be interior minister, trying to deal with illegal immigration a and i improvingnge security situauation in ththe country.

and luigi di maioio, the head of the five-star movement, wilill e in chaharge of f labor and econc devevelopment. anand a very important influentl role in the fufuture of thee coununtry, and obviously dependg on his success, the chances of reelection will be very much up for g grabs. clearly, these are the two key men. and one h hopes that they will e cooperating and workgg together, rather than fighting and kicking one another in the shins. anand it remains very much an on question how that will work out. brent: ok. philip, on the story in rome on this latest twist in the political crisis. thank you very much. here are some of the other

stories making headlines around the world. the prime minister of spain says he will not resign as head of the no-confidence vote that he looks set to lose on friday. the spanish h dia says he no longer has the votes he needs to survive. that could clear the way for a socialist leaeader pedro sanche, , to become prime minister. and denmark's parliament has passed a law that bans the wearing of veils and other face coverings in public. the law is popularly known as the burqa ban. although the government says it is not aimed at any religion. similar laws have been adopted in other european countries, since france did so in 2011. lithuania and romania aided the cia in torture, it has been ruled, violating european laws. the court said bailout of the american agency to mistreat two

terror suspects in secret prisons that it ran in the two countries. reporter: in this building in bucharest, the cia is said to have tortured terror suspects. there is also a secret prison in miscellaneous. lawmakers in the europe and -- in europe and the u.s. have tried to come to terms with the centers. two terror suspects in the detention camp at guantanamo bay took lithuania and romania to the court of human rights. there the judges ruled t the cia operated prisons in both cocountries with t the knowledgd cooperation of the governments, in violation of anti-torture laws. >> there has been a violation of article three of the convention. the substance of aspect. on the complicity of the states, in this program, in that it enabled u.s. authorities to subject the applicant to

inhumane treatment. reporter: the rulining was simir to one against poland in 2014. the court called on romania and lithuania to punish those responsible as quickly as possible. brent: authorities in thailand have banished visitors from one of the country's famed beaches for four months. once a pristine paradise, the bay has become a victim of its own fame. the beach lies on a small island in the and the monsey. the tourism has damaged the coral reefs and harmed see life. authorities say it is time to give the beach a brick. -- break. reporter: maya bay c can be a magigical placece, but just aftr sunrisee the first speedboat shatte t the calm. this man earns his living from tourists, and has mixed feelings

about the closure, e even if its just for a few months. >> before the speed boats came, we had wonderful corals. the votes have damaged them. on the other hand, a lot of us live off of the visitors. reporter: some 20 beach wardens direct the traffic, otherwise it would be total chaos. boats from the mainland spit out hundreds of tourists. the beach is only 200 meters wide and the boats have toto tae turns. the smell of diesel is in the air. as manys 5000 peoeople come here every daday. >> we would die to have something like this around in india. you have to have a limit to everything coming in and out. you have to respect nature for what it has given us. reporter: the damage is mostst shocking undnderwater. dying coral and p plastic rubbi.

not j just here. economistt -- geologists say tht much of the reefs have been harmed. can four months really bring about recovery? >> it takes years for the coral to recover. you have to understand that maya bay has a reduction in the low season anyway, because that is when the storms come. they are closing it went a lot of people are not going generally. reporter: in the peak season, the national park brings in over 50,000 euros a day and entrance fees. how much of that flows back into environmental protection is not clear. the running of the bay's controversial,l,o too is t the y forwarard. >> four m months was the titime everybody cocould agree o on. itit is a start. it wilill give us a chance to inspect the bay and it's a what

else we can do. reporter: the engines are revving again. the last tourists dispersed before sunset. and the heron has the beaeach to himself at last, at least for the next four months. brent: sports news. big news surrounding the world cup in russia. the peru captain has been given the all clear to play in the tournament for the first time by a swiss federal court. he tested positive for cocaine and had a ban imposed. the court is based in switzerland, meaning peru was able to challenge it. the 34-year-old blamed the test on drinking coca tea, which is popular in south america. a reminder of the top story we are following. the united states is set to impose tariffs on steel and aluminum imports from the european union, canada and

mexico. it comes after the talks failed to reach an agreement. the european union, mexico and canada say they will impose countermeasures against the u.s. the man who is going to be the italian prime minister, then dropped out, is taking the post after all. the parties have reached a deal and it means conte could be sworn in by the president on friday. after a short break i will be back to take you through the day. stick around for that. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]

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