US tariffs anger trade partners

United States President Donald Trump has slapped tariffs on imported solar panels and washing machines, angering trade partners as he took his first major protectionist move a year into his term.

The US will impose new duties of as much as 30 per cent on foreignmade solar equipment, the US Trade Representative’s office said yesterday. The President also approved tariffs starting as high as 50 per cent on imported washing machines.

China and South Korea condemned the steps, with the Ministry of Commerce in Beijing calling them a “misuse” of trade measures.

The tariffs were announced as Trump prepares to travel to Davos for the World Economic Forum, where the international business and political elite will discuss topics including the backlash against globalisation.

The new tariffs will add teeth to the President’s “America First” foreign policy after months of threatening to get tough on what he sees as the unfair trade practices of nations including China and South Korea.

“Despite a positive world economic outlook at the outset of 2018, rising trade friction between the US and some of its key trading partners, notably China, is one of the key risks to the global economic outlook,” said Rajiv Biswas, Singapore-based chief Asia-Pacific economist at IHS Markit.

LG Electronics, a maker of domestic appliances, and South Korean solar panel makers fell initially in Seoul trading on the news while Samsung Electronics, which was little changed, said the tariff on washing machines is a “great loss” for US workers and consumers.

South Korea’s Trade Minister said his nation will file a petition with the World Trade Organisation against the US for imposing anti-dumping duties on Korean washing machine and solar-panel makers. The US decision is “excessive”, Kim Hyun-chong said.

China exported more than 21 million washing machines worth just under 19 billion yuan ($4b) globally from January through November last year, according to Customs data.

The US measures will worsen the global trade environment, and China hopes Washington will show restraint in trade restrictions, according to a statement posted on the Commerce Ministry’s official WeChat account.

More US trade action could be on the way. Negotiators from the US, Canada and Mexico are meeting this week in Montreal for the latest round of negotiations on a revised North American Free Trade Agreement.

Both Mexico and Canada are included in the new solar-panel tariffs, but Mexico was exempted from the washing machines remedy. The tariff actions may aggravate tensions in the talks over Nafta, which Trump has threatened to pull out of if the two nations don’t bend to US demands.

The solar tariffs are lower than the 35 per cent the US International Trade Commission recommended in October after finding that imported panels were harming US manufacturers.

He opted for the most punitive recommendation by ITC judges for residential washers.

Rising trade friction between the US and some of its key trading partners, notably China, is one of the key risks to the global economic outlook