Trump tariffs may spark trade war

SEOUL/SYDNEY: US President Donald Trump’s planned tariffs on steel and aluminium will distort global trade and cost jobs, Australia’s trade minister said yesterday, highlighting the risk of retaliatory measures as Asian exporters sought more detail on the plans.

Fears of an escalating trade war hit the share prices of Asian steelmakers and manufacturers supplying US markets particularly hard yesterday.

Trump said the duties of 25% on steel and 10% on aluminum would be formally announced next week, although White House officials later said some details still needed to be ironed out.

‘‘You’re going to have protection for the first time in a long time,’’ Trump told executives from US metals manufacturers in a White House meeting.

Trump has vowed to combat imports as part of his ‘‘America First’’ foreign and economic policies, and has sought to scrap or renegotiate trade agreements since taking office in January 2017.

The metals tariffs are to be imposed for an ‘‘unlimited’’ duration, he said.

Trump’s announcement followed a US Commerce Department finding last month that US steel production was at about 70% of capacity in 2016, or about 79 million metric tonnes out of a possible 113 million, and urged sufficient quotas or tariffs to allow the industry’s production to reach 80% of capacity.

European Commission President JeanClaude Juncker said the 28country economic bloc would announce countermeasures within days, adding the decision appeared to be ‘‘blatant intervention to protect US domestic industry.’’

‘‘Protectionism cannot be the answer to our common problem in the steel sector. Instead of providing a solution, this move can only aggravate matters,’’ Juncker said. ‘‘We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk.’’

‘‘The imposition of a tariff like this will do nothing other than distort trade and ultimately, we believe, will lead to a loss of jobs,’’ Australian trade minister Steven Ciobo told reporters in Sydney.

‘‘My concern remains that . . . we could see retaliatory measures that are put in place by other major economies. That is in noone’s interest.’’

Australia, which has championed the freetrade Trans Pacific Partnership that Trump pulled the United States out of, has sought an exemption for its steel and aluminium to the United States, Ciobo added.

Although China only accounts for 2% of US steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.

‘‘The impact on China is not big,’’ said Li Xinchuang, vice secretarygeneral of the China Iron and Steel Association. ‘‘Nothing can be done about Trump. We are already numb to him.’’

South Korea, the thirdlargest steel exporter to the United States after Canada and Brazil, said it will keep talking to US officials until Washington’s plans for tariffs are finalised.

South Korean trade minister Kim Hyunchong had been in the United States since February 25, the trade ministry said. Kim has met US Commerce Secretary Wilbur Ross and other officials to raise concerns over the socalled Section 232 probe and consider a plan that would minimise the damage to South Korean companies.

Asian steelmakers fear US tariffs could result in their domestic markets becoming flooded with steel products that have nowhere else to go.

‘‘We are concerned about how other exporters react, what will happen with steel that cannot be sold to the US,’’ Vikrom Wacharakrup, Chairman of Iron and Steel Industry Group, Federation of Thai Industries, told Reuters. Thailand exports steel mainly to Asia but also the United States.

The Trump administration also cited national security interests for its action, saying the United States needs domestic supplies for its tanks and warships.

‘‘We continue to seek clarification,’’ said Japanese Trade and Industry Minister Hiroshige Seko. ‘‘I don’t think exports of steel and aluminum from Japan, which is a US ally, damages US national security in any way, and we would like to explain that to the US.’’

India also raised concerns about the use of the national security interests provisions.

Trump believes the tariffs will safeguard American jobs but many economists say the impact of price increases for consumers of steel and aluminum, such as the auto and oil industries, will be to destroy more jobs than they create.

Japan’s Toyota Motor Corp said the tariffs would substantially raise costs and therefore prices of cars and trucks sold in America. — Reuters/DPA

❛ Nothing can be done about Trump. We are already numb to him