Trump’s trade war plans sow chaos
brussels — US President Donald Trump said on Friday trade wars were good and easy to win, striking a defiant tone after global criticism of his plan to slap tariffs on imports of steel and aluminium that triggered a slide in world stock markets.
The European Union pledged firm counter-measures, China urged Trump to show restraint and Canada, the biggest supplier of steel and aluminium to the United States, said it would retaliate if it is hit by US duties.
Trump said on Thursday that tariffs of 25 per cent on steel imports and 10 per cent on aluminium, designed to safeguard American jobs in the face of cheaper foreign products, would be formally announced next week.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump tweeted on Friday.
“Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!” the US president wrote.
The European Commission, the EU executive, called the tariffs a blatant intervention that amounted to protectionism.
While promising to act “firmly”, the European Union, which sees itself as a global counterweight to a protectionist-leaning Trump, made no mention of retaliation but spoke of counter-measures that conform with World Trade Organisation rules. —
When we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!” Donald Trump @realDonaldTrump
When a country (USA) is losing many billions of dollars on trade with every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore — we win big. It’s easy!” XxDonald Trump, US President
We are discussing different measures. Everything from bringing the case to the WTO, alone or with partners who are also affected, and also safeguard measures and possible retaliation Cecilia Malmstrom, EU trade commissioner
WASHINGTON — US President Donald Trump spoke out defiantly on Friday in the face of global criticism of his plan to impose tariffs on steel and aluminum imports, claiming trade wars are “easy to win”.
The fighting words came after the billionaire politician’s proposal sparked a furious reaction from major steel- and aluminum-producing nations and jitters in stock markets around the world.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump tweeted.
“Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
After weeks of rumor and counter-rumour about his administration’s intentions, Trump on Thursday announced he would sign off on measures designed to protect US producers “next week”.
The tariffs — 25 per cent on steel and 10 per cent on aluminium — cover two materials that are the lifeblood of the construction and manufacturing sectors in the United States.
The announcement angered key US allies — Canada, the European Union, Australia and Mexico — as well as rival China. European Commission chief Jean-Claude Juncker vowed the bloc “will react firmly” to defend its interests.
“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” he said.
Canada and Germany both termed the tariffs “unacceptable”,
with the German foreign minister Sigmar Gabriel urging Trump to reconsider.
Trump has long threatened to impose tariffs on steel and aluminum, accusing other countries of dumping and deploying “unfair” trade practices. He has been particularly critical of China, although steel and aluminum each account for less than one per cent of the country’s total exports to the United States. Beijing Friday urged the US to “exercise restraint” and respect international trade rules.
“If all countries followed the example of the United States, [it] will undoubtedly result in a serious impact on the international trade order,” foreign ministry spokeswoman Hua Chunying said at a regular briefing. The timing of Trump’s announcement was provocative for China: its top economic envoy Liu He was in Washington, holding meetings at the White House on Thursday.
“They candidly exchanged their views, building the necessary conditions for the next step in deepening cooperation,” Hua said of the meetings with US officials.
China has previously warned it was ready with counter-measures should the Trump administration deploy tariffs, but the foreign ministry did not indicate Friday that any such moves were in the works. The White House has embarked on a campaign to renew American infrastructure, with steel likely a major input. But Trump’s announcement has faced significant domestic opposition, including within his own White House and the Republican party.
US automakers, oil and gas producers and other industry groups have publicly urged the president to not impose new barriers on metal imports, warning the measures could jack up prices and invite reprisals, harming the US economy.
Sources familiar with Trump’s decision say he faced stern opposition from aides, including top economic advisor Gary Cohn, who argued the move could ultimately damage US industry. But trade hawks like Peter Navarro, who was by the president’s side as he made his remarks, appeared to have won the day.
The same sources said it was not impossible that carve-outs follow, making the measures more palatable to the EU, Canada and South Korea.
Trump’s decision — which leans on a rarely-used trade provision allowing protections for national security — could hit other countries far more than China, which is the world’s largest steel producer but accounts for less than one percent of US imports. Steel producers in Canada, Brazil, Mexico, South Korea and Turkey rely far more heavily on the US market.
Roberto Azevedo, the director-general of the Geneva-based WTO, said the agency was “clearly concerned” at the US plans and warned that “a trade war is in no one’s interests.” “The potential for escalation is real as we have seen from the initial responses,” he said in comments.
The US Commerce Department said last month that the global glut of steel and aluminum threatened US national security, and presented the White House with a set of options, including quotas, tariffs targeting specific countries, and acrossthe-board tariffs on all imports of the metals. Trump’s proposal most closely resembled the last option.
Analysts said that while there were initial sharp stock market losses in the steel and aluminum sectors following the announcement, the main fear was what it could mean in the future. “We think overall, the danger is contagion — the reaction — rather than the actual tariffs themselves,” Fat Prophets resources analyst David Lennox told AFP.
The benchmark Dow Jones Industrial Average lost 1.7 per cent on Thursday and Asian markets quickly followed suit, with Tokyo closing 2.5 per cent down and Hong Kong falling 1.5 per cent on Friday. — AFP