Published: Mon, March 12, 2018
Worldwide | By Gretchen Simon

Forget steel and aluminum, the real trade war is still to come

Forget steel and aluminum, the real trade war is still to come

The EU exports around €5bn worth of steel and €1bn worth of aluminium to the U.S. each year, and the European Commission, the bloc's executive arm, estimates Mr Trump's tariffs could cost some €2.8bn.

"Trump is using this (as) a tactic to try to put more pressure on Canada and Mexico to go along with some of the things the USA wants in the NAFTA negotiations", he added, "If it doesn't work, they will be included in the tariffs".

Trump has also given Commerce Secretary Wilbur Ross the power to provide relief to specific steel and aluminum products that aren't produced in the U.S.

Trump's authority to establish the tariffs stems from a Commerce Department investigation that found that imports of the metals pose a risk to national security.

Signals of countermeasures or exemption requests followed his move.

He called tariffs the "wrong way" to tackle the problem of cheap steel and aluminum being dumped on the U.S. AK Steel was down 4.4% at $5.21 at the time of writing. He gave no details on how this figure was reached, but the US and Chinese governments generally report widely differing trade figures because Beijing counts only the first port to which goods go instead of their final destination.

The WTO this week urged members to avoid triggering an escalation of global trade barriers, and instead to reflect on the situation carefully.

According to statistics from Australia's Department of Foreign Affairs and Trade, the country's exports of steel to the United States were worth $133.5 million in the 2016-2017 fiscal year and exports of aluminium to the USA were worth $129.6 million during that time.

Key U.S. trading partners and businesses have warned the tariffs could backfire, provoking a trade war and hurting allies like the European Union and Japan more than China, their main target.

President Trump signed a new set of tariffs on steel and aluminum imports into the U.S.

Protest on tracks halts train services at Manchester Piccadilly station
According to National Rail, only one exit was functioning at King's Cross as police addressed "an incident" outside. Meanwhile, many passengers reacted on social media platforms to the protest targeting Manchester Picadilly Station.

Lagarde, speaking at a Washington Post forum on women's issues, said it was not the direct economic impact from the tariffs that concerned her most, but its role as a "trigger" for retaliatory responses from trading partners worldwide.

As the United States tries to light a fire under NAFTA negotiations, Canadian Foreign Affairs Minister Chrystia Freeland says Canada will not be bullied or pressured by the United States as part of those talks. "If the perception of investors around the world is that this is uncertain, and you never know where the tariffs are going to go, how high, how low, against whom. then you step back and you don't invest, you wait and that confidence impact could be significant".

However, as NPR's Anthony Kuhn notes, "Despite China's objections, the tariffs are not likely to do it much damage, since less than 2 percent of China's steel exports go to the U.S".

Trump, in turn, has threatened to impose a tax on European cars if tariffs are raised on American goods.

Commission Vice President Jyrki Katainen warned Washington on Friday not to expect any concessions to win an exemption.

Malmström will meet U.S. Trade Representative Robert Lighthizer in Brussels on Saturday to discuss an exemption.

Earlier this week, Trump officially announced tariffs of 25 per cent on steel and 10 per cent on aluminum, despite major opposition from his own party, triggering a possible trade war with China and Europe. The probes were authorized under the seldom-used Section 232 of the 1962 Trade Expansion Act, which gives the president broad powers to impose trade restrictions on domestic security grounds.

Amid the escalating row, European Central Bank chief Mario Draghi has voiced concern for the "state of worldwide affairs".

The EU has warned that it stands ready to slap "rebalancing" tariffs on about 2.8 billion euros ($3.4 billion) worth of USA steel, agricultural and other products, like peanut butter, cranberries and orange juice.

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