Trump’s steel tariff plan drawing flak
Canada, EU and some others have already vowed to retaliate
US President Donald Trump’s announcement on Thursday of tariffs on imported steel and aluminum has sparked concerns about a potential trade war, a disruption of the global trading system and harm to the US economy.
Trump said he will sign measures next week for the US to impose tariffs of 25 percent on steel imports and 10 percent on aluminum imports “for a long period of time”.
“We’re going to build our steel industry back and our aluminum industry back,” he said.
Trump announced the tariffs during a hastily arranged meeting in the White House with steel and aluminum executives, and the timing of the announcement surprised Wall Street. The Dow Jones industrial average dropped 420 points, or 1.68 percent, with analysts saying investors fear retaliation by other countries and higher inflation.
The New York Times reported Trump also said on Thursday that he does not want any nation to be exempted from the order.
Some US allies, including Canada, Japan and the Republic of Korea, are among the 10 biggest sources of steel for the US.
China is the 11th biggest exporter to the US, accountdent ing for 2 percent of its steel imports. China is also the third largest aluminum exporter to the US.
Canada, the European Union and others have already vowed to retaliate against the US tariffs, a decision based on an investigation under Section 232 of the US Trade Expansion Act of 1962 that found steel and aluminum imports pose a national security threat to the US.
Chinese Foreign Ministry spokesperson Hua Chunying said in Beijing on Thursday that the “unreasonable and excessive” use of trade remedy measures by the US will not help revitalize relevant industries at home, but will impact its employment and jeopardize the welfare of US consumers.
“China will take necessary measures to safeguard its legitimate rights and interests,” she said.
Gary Hufbauer, a nonresi- senior fellow at the Washington-based Peterson Institute for International Economics, said the tariffs were “a sad day for trade policy”.
‘Pandora’s box’
Hufbauer said Trump has decided to cite national security as the rationale for protecting US steel and aluminum industries with the tariffs, but that “foreign suppliers and US downstream users see the national security justification as baloney, just pure protection”.
“The Trump administration may eventually grant exemptions to select foreign suppliers, possibly as a bargaining chip for their concessions on other issues,” said Hufbauer, who served as deputy assistant secretary for international trade and investment policy of the US Treasury during 1977-79.
“However, the EU and China, at least, will retaliate in the near future. They might invoke national security concerns as well,”
Wayne Morrison, a specialist in Asia trade and finance at the Congressional Research Services, described tariffs based on national security ground as “unfortunate” and “like opening up a Pandora’s box”.
He said US domestic industries facing foreign competition likely will make the same argument to seek protection, and the US downstream industries that use these products will suffer high costs and become less competitive.
China will take necessary measures to safeguard its legitimate rights and interests.” Hua Chunying, Chinese Foreign Ministry