A world of hurt

Warning on tariffs

FOREIGN Minister Julie Bishop has warned Donald Trump’s planned steel and aluminium tariffs risk spiralling into a trade war that “would harm us all”.

Speaking in New York, Ms Bishop also described the loss of Mr Trump’s economics chief Gary Cohn, who quit the White House in protest at the hardline trade policy, as a blow to Australia’s hopes of securing exemptions from the tariffs.

The US President plans to sign a proclamation that would impose tariffs on imports of 25 per cent tariff on steel and 10 per cent on aluminium.

The White House has indicated some countries, including Canada and Mexico, may be excluded.

The tariffs have drawn international condemnation and sparked threats of retaliation from Europe and Asia. Domestically, they have been welcomed by steel manufacturers but stoked fears of cost blowouts and job losses in steel-reliant industries.

Former Australian Prime Minister Kevin Rudd added his voice to those criticising the “decisively negative” measures in a session with Ms Bishop at the Asia Society.

BHP chief Andrew Mackenzie said the tariffs marked a “black day” for free trade and Reserve Bank Governor Philip Lowe warned of a “very big shock” to the world economy.

Mr Rudd said: “It’s a bit of a worry for us all though, isn’t it, when the architects of the global free trade order, the US, are heading in reverse direction”.

Ms Bishop said in her speech there was a danger in any move to protectionism.

“Some of the risks of closing markets are very much in our minds, as a dispute over steel threatens to widen,” she said.

“If the current dispute widens, and action leads to counter-reaction, we might see a downward spiral that could put at risk the open trading environment and that would harm us all.”