Trump jabbed first, and now world hits back in trade fight
WASHINGTON — The United States attacked first, imposing tariffs on steel and aluminum from around the globe and threatening to hit tens of billions of dollars in Chinese products.
Now, the punching back.
The European Union is set Friday to slap tariffs on $3.4 billion in American products, from whiskey and motorcycles to peanuts and cranberries. India and Turkey have already targeted U.S. products, ranging from rice to autos to sunscreen.
And the highest-stakes fight still looms: In two weeks, the United States is to start taxing $34 billion in Chinese goods. Beijing has vowed to immediately retaliate with its own tariffs on U.S. soybeans and other farm products in a direct shot at President Donald Trump’s supporters in America’s heartland.
The tit-for-tat conflict between the United States and China — the world’s two largest economies — is poised to escalate from there. The rhetoric is already intensifying.
“We oppose the act of extreme pressure and blackmail by swinging the big stick of trade protectionism,” a spokesman for China’s Commerce Ministry said Thursday. “The U.S. is abusing the tariff methods and starting trade wars all around the world.”
Cecilia Malmstrom, the EU’s trade commissioner, acknowledged that the EU had targeted some iconic American imports for tariffs, like Harley-Davidson motorcycles and bourbon, to “make noise” and put pressure on U.S. leaders.
John Murphy, a senior vice president at the U.S. Chamber of Commerce, estimates that $75 billion in U.S. products will be subject to new foreign tariffs world is by the end of the first week of July.
“We’ve never seen anything like this,” said Mary Lovely, a Syracuse University economist who studies international trade — at least not since countries tried to wall themselves off from foreign competition during the Great Depression.
Those personally in the line of fire are among the most concerned.
“It will be a disaster,” said Nagesh Balesu, who owns the Salt Whisky Bar and Dining Room in London and expects the European Union’s tariffs to add nearly $7 to the price of a bottle of Jack Daniels, which is imported from Tennessee. “It’s going to hit customers, that’s for sure. How they’ll take it, we’ll have to wait and see.”
As painful as the brewing trade war could prove, many have seen it coming.
Trump ran for the presidency on a vow to topple seven decades of American policy that had favored ever-freer trade among nations. He charged that a succession of poorly negotiated accords — including the North American Free Trade Agreement and the pact that admitted China into the World Trade Organization — put American manufacturers at an unfair disadvantage and destroyed millions of U.S. factory jobs.
He pledged to impose tariffs on imports from countries that Trump said had exploited the United States. Late last month, Trump proceeded to infuriate U.S. allies — from the EU to Canada and Mexico by imposing tariffs of 25 percent on imported steel and 10 percent on aluminum.
The president justified the move by saying imported metals threatened America’s national security — a dubious justification that countries have used rarely because it can be so easily abused.
And he is threatening to impose another national security-based tariff on imports of cars, trucks and auto parts.
The rising tensions and the chaos surrounding the steel and aluminum tariffs are starting to generate pushback on Capitol Hill. Senators this week grilled Commerce Secretary Wilbur Ross.
“As you consider these tariffs, know that you are taxing American families, you are putting American jobs at risk, and you are destroying markets — both foreign and domestic — for American businesses of all types, sorts and sizes,” said Senate Finance Chairman Orrin Hatch, R-Utah.