Theresa warns Trump: Don’t start a trade war
THERESA May warned Donald Trump of her ‘deep concern’ last night over his plans for huge US tariffs on metal imports.
In a phone call, the Prime Minister emphasised her opposition to penalties announced last week of 25 per cent on imported steel and 10 per cent on aluminium.
Mr Trump also threatened to increase tariffs on European cars after EU officials warned they might raise import taxes on Harley Davidson motorbikes, Jack Daniel’s whiskey and Levi’s jeans.
The President accused Brussels of having already imposed ‘massive’ tariffs on American products.
The escalation came despite pleas from major US firms and international allies such as Britain to step back from the brink of a global trade war.
The spat will raise doubts about Britain’s chances of securing a trade deal with Mr Trump after Brexit.
No10 said Mrs May ‘raised deep concern at the President’s announcement on steel and aluminium tariffs, noting that multilateral action was the only way to resolve the problem of global overcapacity in all parties’ interests’.
But Mr Trump tweeted: ‘If the EU wants to increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a tax on their cars which freely pour into the US.
‘They make it impossible for our cars (and more) to sell there. Big trade imbalance!’
The US puts a 2.5 per cent tariff on cars assembled in Europe, while the EU imposes 10 per cent on US-built cars.
In his presidential campaign, Mr Trump made tackling ‘unfair trade’ a key pledge.
He said a trade deficit with countries such as China had devastated traditional American industries and forced jobs and factories to be relocated abroad. He tweeted that trading partners such as the EU had ‘taken advantage of us for years’. On Saturday, he said: ‘The European Union – brutal. They’ve been brutal to us. They’ve banded together to beat the US in trade.’
The EU and the US charge each other a range of tariffs on imports, although there are none on most steel. Aluminium exports are taxed by up to 10 per cent by the EU. The US charges up to 6 per cent.
Motorcycles exported to the EU face tariffs of up to 8 per cent. Trousers exported to the EU from the US face tariffs of 12 per cent. US tariffs on EU trousers go up to 28 per cent.
Margrethe Vestager, the EU’s competition commissioner, said Brussels would respond to the threat of steel duties to ‘defend European industry, and the world trading system’. She described Mr Trump’s scheme as ‘ one- sided protectionist measures which hurt, not just jobs, but the whole system of rules that makes our global economy work’.
China, which also exports steel to the US, vowed to take ‘ necessary measures’ if Mr Trump imposed fresh tariffs.
His proposals even alarmed US manufacturers. Ford, General Motors and Campbell’s Soup said the measures may force them to raise prices. They rely on metal imports to make their products because the US does not produce enough.
A Ford spokesman said: ‘Despite the fact that Ford buys the majority of its steel and aluminium for US production in the US, this action could result in an increase in domestic commodity prices, harming the competitiveness of American manufacturers.’
Cabinet Office minister David Lidington told BBC One’s Sunday Politics programme yesterday: ‘Trade wars don’t do anybody any good.
‘We tried in Britain in the Sixties and Seventies protecting our car industry. It didn’t work. It protected inefficiencies, we lost all our export markets because our competitors went out and gobbled those up.’
‘The European Union – brutal’