The New York Times tries to rationalize it, noting that Trump is exempting Canada and Mexico pending NAFTA renegotiation, and even raising the possibility that the European Union and others could make a deal.
But analysts have warned the move – which Trump says is necessary for American national security – will still ramp up tensions and could lead to a trade war.
The World Trade Organization (WTO), the Geneva-based institution that rules on trade disputes, gives countries wide leeway to determine their national security interests.
“A strong steel and aluminum industry are vital to our national security, absolutely vital”, he said.
Kosei Shindo, president of Nippon Steel Federation, said the move by the USA could lead to countermeasures being implemented by other countries around the world, which would go against the spirit of the free trade system.
They also have expressed concerns that the new tariffs would amount to a tax hike on USA businesses and consumers just as they were celebrating a victory in passing last year’s tax reforms.
Brussels has reminded Trump that tit-for-tat trade measures deepened the Great Depression in the 1930s and in the 2000s cost thousands of United States jobs when Washington imposed tariffs on European steel. “But if you are a small fabricator in MI or OH, and you use a foreign metal because it has been price attractive for you to do that or there has been some relationship you have with this supplier, those supply chains are going to be cut off by these increase tariffs”. Annoy the president, which considering his renowned hypersensitivity is easy, and those tariffs are slapped on Canadian steel and aluminum shipped south of the border. AAPC also noted that the US automotive industry purchases about 15% of the steel consumed in the USA and almost 38% of all aluminum used in our country.
“We would perhaps have to raise the tariffs of everybody else, and modestly I may add, to ensure that our steel and aluminum industries are protected”, the official said, speaking to reporters on the condition of anonymity. “Europe is certainly not a threat to American internal security so we expect to be excluded”, European trade Commissioner Cecilia Malmstrom said in Brussels.
The ramping up of rhetoric is a move away from the more conciliatory tone struck in recent weeks when Chinese President Xi Jinping’s top economic adviser, Liu He, visited Washington for trade talks. Does he even know that Canada is the largest source of imported steel, therefore the tariffs will do little to protect American steelworker jobs? Japanese Foreign Minister Taro Kono called the decision “extremely regrettable”, predicting it could have a major impact on the economy and the relationship between the USA and Japan, as well as the global economy.
But a report released this week from the Brookings Institution, a D.C. -based think-tank, shows many US voters from all sides of the political spectrum are already anxious about the effect of Trump’s anti-trade attitude on jobs.
ENERGY: Benchmark U.S. crude added 64 cents to $60.76 barrel in electronic trading on the New York Mercantile Exchange, while Brent crude, used to price worldwide oils, rose 77 cents to $64.38 a barrel in London.
The U.S. president argued that “dumping” of cheap imports is eroding U.S manufacturers’ ability to survive.
Many Republicans hold that imposing tariffs on steel and aluminum are an abuse of this law and are pushing to restrict it.
“That’s a thinly-veiled reference to NAFTA negotiations, which are now in their eighth round of talks as the three countries seek to update the more than two-decade old agreement that governs trade between them”, the Evans story continues.
The EU has said it could respond with new tariffs on American products including orange juice, bourbon, denim, cranberries, peanut butter and motorcycles. Ultimately, no one wins a trade war.
“So it’s doubly absurd that we should then be caught on an investigation on national security”, Fox said told the BBC on Thursday. Many U.S. trading partners reacted by raising their own tariffs, which contributed significantly to shutting down world trade.
Canada is expressing cautious optimism after Trump announced the country is exempt from the new steel and aluminum tariffs.
Well, now the ball is in the courts of Prime Minister Justin Trudeau and Trade Minister Chrystia Freeland.
The new tariffs will take effect in 15 days, with America’s neighbors indefinitely spared “to see if we can make the deal”, Trump said.
Canada is drawing a line between the two issues.
The president said he was pleased with progress in the NAFTA talks, although he repeated that he would be willing to terminate the agreement. And because America is the world’s second largest exporter, those reactions can hurt us in many places. But the tariffs will hit Canada the hardest as it provides 16 percent of total USA demand in steel, followed by Brazil and South Korea, while China provides a modest 2 percent despite all the tough protectionist rhetoric directed against Beijing.
Bank of Canada governor Stephen Poloz has already anxious publicly that trade fears are having an adverse effect on jobs and the economy as companies hold off on investments until they see whether a NAFTA deal can be done. “We trust and hope that the UK Government will support such measures in due course”, said its Director Gareth Stace.