US President Donald Trump has said that he would impose a 25 per cent import tariff on steel and 10 per cent on aluminium to protect US producers, a move that could trigger a trade war with China and Europe.
The President says it’s to end what he calls decades of unfair trade policies decimating those industries and encourage production here in the US. “The countries we deal with are not going to sit there and take this”, said Phil Levy, senior fellow at the Chicago Council on Global Affairs, and a former White House economist under former President George W. Bush.
Azevedo has shown growing frustration in recent months over US efforts to block new appointments to the organization’s appellate body – a move that could hamper one of its key roles: resolving disputes.
Canada is seeking an exemption to new US trade restrictions on aluminum and steel, and is vowing to retaliate if slapped with any new tariffs.
The thing that China’s steelmakers care much more about is their domestic market, which consumes about half of the world’s steel and has been doing rather well of late. He said the measure will be signed “sometime next week”.
Chad Bown, former White House economist and now a trade expert at the Peterson Institute for International Economics (where I used to work, ) had a biting response to the president’s trade-war-mongering tweets. “If the U.S.is going to implement any measures, we expect the measures be WTO-rules consistent”.
Meanwhile, the United Steelworkers union strongly favours tariffs – but not in Canada.
On Friday, Trump elevated concerns about a full-blown trade fight even further by tweeting that “trade wars are good, and easy to win”.
Just under 200,000 U.S.jobs were eliminated in 2002 alone due to higher steel prices caused by the tariff, according to a 2003 study by steel-consumer organization Trade Partnership Worldwide LLC.
“Markets hate uncertainty and we still don’t know exactly who and by how much these tariffs will impact trade”, said Ryan Detrick, chief senior market strategist at LPL Financial. “The EU will react firmly and commensurately to defend our interests”. The US measures “overturn the global trade order”, Wen Xianjun, vice chairman of the China Nonferrous Metals Industry Association, said in a statement.
Although China only accounts for 2 percent of US steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.
The North American Free Trade Agreement would be immediately affected by these tariffs, as Canada is the biggest steel and aluminum importer to the U.S.in the world (16% steel, 43% aluminum).
Tariff decision: a Chinese worker cuts steel; the U.S. president’s decision could spark a trade war.
Though only 5 percent of German steel exports go to the USA, he warned of a knock-on effect that would stoke “protectionism worldwide”.
Abroad, even though US trade law authorizes the president to impose tariffs if imports are determined to endanger national security, doing so is likely to invite legal challenges from other countries and alienate our trading partners. “The continued rising levels of imports of foreign steel threaten to impair the national security by placing the US steel industry at substantial risk of displacing the basic oxygen furnace and other steelmaking capacity, and the related supply chain needed to produce steel for critical infrastructure and national defense”, the Commerce Department recently concluded.
Critics say that justification is a stretch and makes a mockery of global trade rules.