Europe and the IMF urged Donald Trump on Wednesday to step back from the brink of a trade war, after the resignation of his economic adviser emboldened those encouraging him to push ahead with tariffs on imported steel and aluminium.

The departure of Gary Cohn, seen as a bulwark against Trump’s economic nationalism, hit shares, oil and the dollar, as investors saw an increased likelihood of tit-for-tat trade measures that would depress global growth.

Trump plans to impose a duty of 25 percent on steel and 10 percent on aluminium to counter cheap imports, especially from China, that he says undermine U.S. industry and jobs.

But that risks retaliatory tariffs on U.S. exports – not least by Canada and Europe – and complicates talks on the North American Free Trade Agreement (NAFTA).

“In a so-called trade war … nobody wins, one generally finds losers on both sides,” International Monetary Fund head Christine Lagarde said on Wednesday, adding that a trade war would take a “formidable” toll on global economic growth.

In Geneva, China raised its concerns at the World Trade Organization where 17 other WTO members also voiced misgivings.

“Many said they feared tit-for-tat retaliation which could spiral out of control, damaging the global economy and the multilateral trading system,” WTO spokesman Keith Rockwell said.

A trade official quoted Canada’s WTO ambassador as saying: “We fear that the United States may be opening a Pandora’s Box that we would not be able to close.”

“EASY TO LOSE”

In his first tweet on Wednesday, Trump showed no sign of backing down, saying the United States had lost more than 55,000 factories and 6 million manufacturing jobs and let its trade deficit soar since the first Bush administration.

“Bad policies & leadership. Must win again!” he tweeted, a day after saying he did not fear a trade war.

“When we’re behind on every single country, trade wars aren’t so bad,” he told reporters.

But European Council President Donald Tusk, who will chair a summit on March 22-23 where EU leaders will discuss the threat of a “serious trade dispute”, said Trump’s view that trade wars were good and easy to win was wrong.

“The truth is quite the opposite. Trade wars are bad and easy to lose,” Tusk told reporters.

He was speaking after the EU executive met to discuss a list of 2.8 billion euros ($3.5 billion) worth of U.S. products – from bourbon to Harley Davidson motorbikes – on which Europe could apply a 25 percent tariff if Trump goes ahead.

“We are eager not to escalate this,” EU trade commissioner Cecilia Malmstrom said.

“We do not want this to go out of proportion, but … if it does happen we will have to take measures to protect European jobs.”

For those who fear a trade war, the candidates to replace Cohn as Trump’s adviser do not bode well: Peter Navarro, the White House National Trade Council head who wrote a book called “Death by China: Confronting the Dragon —

A Global Call to Action”, and conservative commentator Larry Kudlow.

German Economy Minister Brigitte Zypries said: “I hope Trump changes his mind … It’s very important that there are advocates for this in the White House. That’s why I’m worried about the latest signals coming from the USA.”

Britain, keen to foster global trade relations as it prepares to leave the EU, said it was “very disappointed” by Trump’s plan. ($1 = 0.8054 euros)