Saturday, 19 January, 2019

Trump's tariffs spark global ire, markets plunge

US President Donald Trump and First Lady Melania Trump walk off Air Force One at Andrews Air Force Base Maryland US President Donald Trump and First Lady Melania Trump walk off Air Force One at Andrews Air Force Base Maryland
Nellie Chapman | 03 March, 2018, 07:05

President Trump's surprise plan to impose tariffs on aluminum and steel imports is earning praise from some Democrats, including Rep. Marcy Kaptur of Ohio.

But the president tried to shrug off fears of a trade war by declaring that they are "good, and easy to win" in a tweet on Friday.

Later Friday, he tweeted: "We must protect our country and our workers".

About a third would be steel grades, another third other industrial products and a final third agricultural products. "IF YOU DON'T HAVE STEEL, YOU DON'T HAVE A COUNTRY!" he wrote.

The tariff could mean big price increases for United States steel companies.

As potential retaliation against the U.S., the commission has prepared a list of products which will be slapped with heavy tariffs if Trump follows through with his policy as expected next week.

So what we're really talking about is a targeted tax on a relatively small part of our trade portfolio.

It remains unclear whether Trump will exempt Canada, which is the largest steel and aluminum exporter to the U.S.

"If any of our members have any concerns about any actions adopted by another member, they can raise this in the WTO", he said, refusing to comment directly on Trump's plans.

His announcement came only after an intense internal White House debate and it brought harsh criticism from some Republicans.

Capital Alpha Partners, a policy research group in Washington, said a quick reversal by Trump was highly unlikely.

These measures could also exacerbate the already-strained renegotiation of the North American free-trade agreement.

He offered statistics to support his argument, saying Canada buys billions of dollars more in steel from the United States than it ships to American buyers.

"There's about one ton of steel in a auto", Ross said. That's because so many American industries need steel and aluminum: They're used to build cars, skyscrapers, roads, bridges, washing machines, refrigerators, and a whole host of other products.

The EU, which sees itself as a global counterweight to a protectionist-leaning Trump, made no mention of retaliation but spoke of countermeasures that conform with World Trade Organization (WTO) rules. Many in the agricultural industry fear that retaliatory measures from these countries could hurt US exports of meat and grains. South Korea and Malaysia account for 38% and 14% of Indian aluminum exports respectively.

Trump has long threatened to impose tariffs on steel and aluminum, accusing other nations of dumping and deploying "unfair" trade practices.

He declined, however, to say whether he believes Trump's action could unleash a global trade war.

Fiona Cincotta, market analyst at City Index, said fears of retaliatory protectionism were weighing on markets. Make no mistake: "If the president goes through with this, it will kill American jobs - that's what every trade war ultimately does". R Street's Clark Packard observes that "while steel unquestionably is vital to USA military superiority. only about 3 percent of steel shipped domestically in 2016 was used for defense and national security purposes".

"If all countries followed the example of the United States, there will undoubtedly result in a serious impact on the global trade order", Chinese Ministry of Foreign Affairs spokeswoman Hua Chunying (華春瑩) told a regular news briefing.