We do not need a trade war with US
DONALD Trump’s plans for a 25% tariff on steel imports, purportedly to defend US national security, will stir fears that this economic and military superpower is embracing protectionism.
The Welsh tinplate industry was devastated by punitive tariffs introduced in the US at the end of the 19th century in a bid to help the local industry. This resulted in legions of Welsh workers crossing the Atlantic to put their skills to use in US mills.
We are not likely to see mass migration to Trump’s America, but protectionism remains dangerous and a trade war would be highly damaging, especially if it featured punitive measures against European cars.
The US market is by no means the biggest for Tata Steel Europe’s produce, but Mr Trump has injected uncertainty into a sector which could use stability, especially after the crises of recent years which saw major operations in England close down and gave Welsh workers cause to fear for their jobs.
If steel super-producers find it harder to sell to the US, we can expect even greater competition in the markets where our sector has a strong track record of sales.
Welsh steel exporters have shown flexibility, courage and creativity in a bid to keep the industry alive. Once again, they may have to come up with yet more solutions to ensure that steel production does not decline in this nation.
Mr Trump used protectionist rhetoric throughout his election campaign so we should not be surprised as he works to turn it into reality. He knows that if he loses the loyalty of his base – for whom the restoration of US manufacturing strength is a priority – his chances of winning re-election in 2020 are slim.
He may have calculated that it will boost his credibility with grassroots voters if there is the spectacle of EU leaders shouting at him. If the EU retaliates with trade tariffs on bourbon and Harley-Davidsons, Mr Trump will cast himself as a patriotic warrior in the face of international bureaucrats who are enemies of Americana.
It will be a cause for regret if the US turns its back on free trade. The post-World War II economic order is by no means perfect but liberal trading links between nations have helped spread prosperity, lift millions out of poverty and cement peaceful relationships.
The UK Government’s Brexit vision is underpinned by the hope that trade deals can be struck with giant economies. We may have to do this in a chapter of chaos. The Western Mail newspaper is published by Media Wales a subsidiary company of Trinity Mirror PLC, which is a member of IPSO, the Independent Press Standards Organisation. The entire contents of The Western Mail are the copyright of Media Wales Ltd. It is an offence to copy any of its contents in any way without the company’s permission. If you require a licence to copy parts of it in any way or form, write to the Head of Finance at Six Park Street. The recycled paper content of UK newspapers in 2016 was 62.8%