* Cohn resignation strengthens US trade hawks
* Fear of global trade war hits stocks, oil, dollar
* EU Commission meets to discuss retaliation strategy
* IMF says expect a "formidable" impact on growth
By Robin Pomeroy
LONDON, March 7 (Reuters) - Europe and the IMF urged Donald Trump on Wednesday to step back from the brink of a trade war, after the resignation of his top 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 onWednesday, as investors saw an increased likelihood oftit-for-tat trade measures that would depress global growth. plans to impose a duty of 25 percent on steel and 10percent on aluminium to counter cheap imports, especially fromChina, that he says undermine U.S. industry and jobs.
But the move risks retaliatory measures against U.S. exportsand further complicates efforts to save the North American FreeTrade Area (NAFTA).
"In a so-called trade war ... nobody wins, one generallyfinds losers on both sides," IMF chief Christine Lagarde said onWednesday.
The International Monetary Fund head said Canada - thelargest supplier of steel and aluminium to the United States -and Europe - whose car exports Trump has threatened to target -are both likely to impose retaliatory tariffs on U.S. goods.
"If world trade were jeopardised by such measures, theywould become a vector for lower growth and a slowdown ofcommerce. The impact on growth would be a formidable," Lagardesaid.
On Tuesday Trump appeared ready for a trade war.
"When we're behind on every single country, trade warsaren't so bad," he said at a news conference with Swedish PrimeMinister Stefan Lofven who responded by saying: "I am convincedthat increased tariffs hurt us all in the long run."
The European Union has drawn up a list of U.S. products -from bourbon to Harley Davidson motorbikes - on which to applytariffs if Trump goes ahead. trade war has no winners and if it does not happen, forthe better, then we can work with our American friends and otherallies on the core issue of this problem, overcapacity,"European Commissioner for Trade Cecilia Malmstrom said.
"But if it does happen we will have to take measures toprotect European jobs," she added, after a meeting in Brusselsto discuss the retaliation strategy.
For those who fear a trade war, the candidates to replaceCohn as Trump's adviser do not bode well: Peter Navarro, theWhite House National Trade Council head who wrote a book called"Death by China: Confronting the Dragon — A Global Call toAction", and conservative commentator Larry Kudlow.
German Economy Minister Brigitte Zypries said: "I hope Trumpchanges his mind ... It's very important that there areadvocates for this in the White House. That's why I'm worriedabout the latest signals coming from the USA." keen to foster global trade relations as itprepares to leave the EU, said it was "very disappointed" byTrump's plan. skeptics gain upper hand in White House as Cohn quits
targets U.S. bourbon, bikes, blue jeans for trade riposte
Marchionne calls for cooling-off on U.S. trade rhetoric
(Editing by Raissa Kasolowsky)