Wednesday, 18 July, 2018

Largest US business group attacks President Trump on tariffs

Nellie Chapman | 03 July, 2018, 18:57

Retaliation for his tariffs came swiftly.

As a trading partner, the European Union is "possibly as bad as China, only smaller", US President Donald Trump said in an interview with the right-wing Fox News channel on Sunday. And while other major economies like the European Union and China are slightly higher, they pale in comparison to protectionism in South Asia, South America, and Africa.

Just 45.9% of tariff lines are subject to no tax at the United States border.

Assuming counter-measures along the lines of those taken in response to existing United States import tariffs on steel and aluminium, up to US$294 billion of USA exports - 19% of overall U.S. exports - could be affected, the submission said. For instance, one of Trump's top targets - Canada - imposes average tariffs of 4.2%, compared to the US's 3.5%. The EU has targeted $3.2 billion in American goods exported to the 28-member bloc, including bourbon and Harley Davidson motorcycles. China is expected to strike back with tariffs on a like amount of USA exports. As with steel and aluminum, "national security" would be the justification.

Tom Donohue, president of the U.S. Chamber of Commerce, is launching a new campaign to oppose Trump's trade tariff policies.

ANALYST'S TAKE: "In the lead up to the July 6 tariffs implementation date, uncertainties continue to loom and with that, Asian equity markets look set to be braced for another day of lackluster trading", said Jingyi Pan of IG.

"Economic analysis confirms that an increased tariff on these products will be harmful first and foremost for the U.S. economy", said the letter, seen by AFP on Monday.

The group's analysis of the harm each U.S. state could suffer from retaliation by USA trading partners painted a gloomy picture that could bring pressure on the White House from Republicans ahead of congressional elections in November.

Trump has said that allies such as the European Union are "as bad as China" on trade. Later this month, EU President Jean-Claude Juncker will fly to Washington for talks. But based on those same measures, numerous US's major trading partners aren't too far off base.

The European Union has threatened to retaliate against US President Donald Trump in the escalating trade conflict developing across the Atlantic.

The commission also pointed out that European auto companies employ 120,000 Americans in manufacturing plants in the United States.

In a submission to the U.S. authorities, the European Commission warned: "Economic analysis confirms that an increased tariff on these products (cars and auto parts) will be harmful first and foremost for the United States economy".