Trump threat­ens sanc­tions

Wash­ing­ton con­sid­ers lim­its on steel im­ports

Bangkok Post - - ASIA -

WASH­ING­TON: US Pres­i­dent Don­ald Trump threat­ened re­tal­ia­tory ac­tion against two ma­jor Asian trad­ing part­ners on Tues­day, warn­ing of sanc­tions against China while vow­ing to re­vise or scrap a free trade deal with South Ko­rea.

Ac­cus­ing Beijing of dec­i­mat­ing Amer­i­can steel and alu­minium in­dus­tries, Mr Trump said he was “con­sid­er­ing all op­tions,” in­clud­ing tar­iffs and quo­tas.

Mr Trump re­cently re­ceived two Com­merce Depart­ment re­ports con­cern­ing al­leged Chi­nese sub­si­dies for steel and alu­minium ex­ports — ma­te­ri­als that are vi­tal for in­dus­tries from con­struc­tion to autos.

He has an­other two months to de­cide on pos­si­ble re­tal­ia­tory ac­tion, but strongly in­di­cated that he is lean­ing to­ward hit­ting back at Beijing.

“I will make a de­ci­sion that re­flects the best in­ter­ests of the United States, in­clud­ing the need to ad­dress over­pro­duc­tion in China and other coun­tries,” he said.

Ex­perts be­lieve any US sanc­tions would prompt China to re­spond with sanc­tions of its own, rais­ing the spec­tre of a trade war be­tween the world’s two largest economies.

China pro­duces around half of the world’s steel and is ac­cused of flood­ing the mar­ket in or­der to keep the eco­nomic wheels turn­ing at home.

For decades Chi­nese lead­ers have been con­sumed with the need to — as for­mer pres­i­dent Hu Jin­tao once put it — cre­ate “25 mil­lion jobs a year.”

But Mr Trump also is un­der do­mes­tic pres­sure. He came to of­fice vow­ing to be a cham­pion of Amer­ica’s rust belt and said on Mon­day he had to act to save the “empty fac­to­ries” he saw on the cam­paign trail.

The US trade deficit — which Mr Trump has vowed re­peat­edly to fix — widened even fur­ther dur­ing his first year in of­fice, up 12% to $566 bil­lion.

“They’re dump­ing and de­stroy­ing our in­dus­try, and de­stroy­ing the fam­i­lies of work­ers, and we can’t let that hap­pen,” Mr Trump told a group of Repub­li­can and Demo­cratic law­mak­ers at the White House.

Mr Trump re­ceived some sup­port from the group, but also warn­ings that ac­tion against China could drive up prices and hurt US man­u­fac­tur­ing out­side the steel and alu­minium sec­tors.

“Mr Pres­i­dent, I think we do need to be care­ful here, that we don’t start a re­cip­ro­cal bat­tle on tar­iffs,’ said Repub­li­can Sen­a­tor Roy Blunt.

“You know, we make alu­minium and we make steel,” he said. “But we buy a lot of alu­minium and we buy a lot of steel as well.”

Daniel Iken­son of the pro-trade CATO in­sti­tute said that Mr Trump may be forced moder­ate his ac­tions, if not his tone.

“De­spite the rhetoric, Trump doesn’t want to sub­vert ‘his’ econ­omy,” Mr Iken­son wrote this week.

“Trump is to­day more aware that the im­pul­sive ac­tions he has threat­ened to take would carry some very sig­nif­i­cant eco­nomic and po­lit­i­cal costs.”

Tak­ing aim at Seoul, Mr Trump com­plained that Amer­ica’s 2012 free trade deal with South Ko­rea “was a dis­as­ter,” vow­ing the United States would rene­go­ti­ate a “fair deal” or scrap it al­to­gether.

The Trump ad­min­is­tra­tion ini­ti­ated talks to rene­go­ti­ate the United States-Ko­rea (KORUS) trade agree­ment in July last year, ar­gu­ing it was lop­sided be­cause Amer­i­can’s bi­lat­eral trade deficit had bal­looned un­der it.

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