Meanwhile, shares of big metal consumers including planemaker Boeing and heavy machinery maker Caterpillar declined about 1.5 per cent each.
President Trump on Thursday slapped a 25 percent tariff on steel imports from the European Union, Canada and Mexico, moving to punish what he saw as unfair competition after leaders from the two regions were unable to convince him otherwise. He said that talks with Canada and Mexico over amending the North American Free Trade Agreement were "taking longer than we had hoped".
Canada's minister of foreign affairs, Chrystia Freeland, said her country would place tariffs on up to 16 billion Canadian dollars ($12.4 billion) worth of American goods, including steel and aluminum.
Canadian Prime Minister Justin Trudeau criticized the US decision, calling the tariffs "totally unacceptable" and their premise of Canada being a threat to national security "inconceivable".
The administration also said it was conducting a similar investigation into imported cars - a market where the Mexican economy is deeply intertwined with the United States.
Canadian prime minister Justin Trudeau hit back at the justification, saying: "That Canada could be considered a national security threat to the United States is inconceivable". The EU had previously released a list of USA products that would be subject to tariffs in the event the metal restrictions went into effect.
Mexico said it would tax a number of US imports, including pork bellies, apples, grapes, cheeses and flat steel.
Shares in StelCo Holdings Inc fell 3.5 percent, while the broader Canadian stock index ended up 0.1 percent.
The Mexican peso dropped about 1 percent, hitting its weakest level against the dollar in almost 15 months, and the Canadian dollar shed about 0.6 percent.
The EU threatened tariffs on Harley Davidson motorcycles and bourbon, measures aimed at the political bases of US Republican legislators. European Union exports potentially subject to United States duties are worth 6.4 billion euros ($7.5 billion).
"FAIR TRADE!" read one tweet by Trump Thursday.
Throughout his presidential campaign, Trump accused China of dumping steel on the USA market - and said previous presidents had made a series of "bad deals" to promote free trade. Now the tariffs on Canada, Europe and Mexico will take effect Friday morning. Mexico was the third largest, behind South Korea.
Trudeau said Thursdays tariff announcement marks "a bit of a turning point, but we've always known that this administration is unpredictable".
The US administration also launched a national security investigation last week into vehicle and truck imports, using the same 1962 law it has applied to curb incoming steel and aluminum.
The Dow Jones Index dropped 250 points on the announcement and fear is growing that similar tariffs will be announced by Russian Federation and China in coming days.
"That United States has been taken advantage of for many decades on trade". The EU also started the process of filing a complaint with the World Trade Organization.
"We are imposing dollar for dollar tariffs for every dollar levied against Canadians by the USA", he wrote.
"Our steel and aluminum industries are a source of critical supply for American manufacturers and its defence industry".