World steels itself for possible trade war

THE UNITED States President Donald Trump’s plan to slap taxes on steel and aluminium i mports was branded Friday as “absolutely unacceptable” by Prime Minister Justin Trudeau of Canada, the United States’ biggest foreign source of both metals.

Trump hasn’t sparked a trade war – yet. But his provocative action has raised the risk of an all-out conflict that could pit the United States against its friends and the entire global financial system that it helped create after World War II. When Trump announced on Thursday that he was imposing a 25 per cent tariff on steel and 10 per cent tariff on aluminium on national security grounds, he set into motion the possibility that trading partners would fight back with tariffs of their own.

The rebukes delivered on Friday suggested that some countries were prepared to retaliate if necessary.

Trudeau stressed in his comments that he was prepared to “defend Canadian industry” and that the tariffs would also hurt US consumers and businesses because prices could rise.

The 28 countries in the European Union could respond by taxing goods that are core to the American i dentity such as Bourbon whiskey, blue jeans, and Harley Davidson motorcycles, said Jean-Claude Juncker, president of the European Commission.

“I don’t like using the word, trade war, but I can’t see how this isn’t part of war-like behaviour,” Juncker told German media.

Roberto Azevedo, the director-general of the World Trade Organization, warned that a “trade war is in no one’s interests”.

China – the world’s largest steel producer and Trump’s primary target – stayed quiet about how it would respond.

The White House has promised more details next week when the president signs the tariffs into law.