Trump defiant as tariffs spark global anger, stock market plunges
By Agence France-Presse
US President Donald Trump spoke out defiantly Friday in the face of global criticism of his plan to impose tariffs on steel and aluminum imports, claiming trade wars are “easy to win”.
The fighting words came after the billionaire politician’s proposal sparked a furious reaction from major steel- and aluminum-producing nations and jitters in stock markets around the world.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump tweeted.
“Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
After weeks of rumor and counter-rumor about his administration’s intentions, Trump on Thursday announced he would sign off on measures designed to protect US producers “next week”.
The tariffs — 25 percent on steel and 10 percent on aluminium — cover two materials that are the lifeblood of the construction and manufacturing sectors in the United States.
The announcement angered key US allies — Canada, the European Union, Australia, and Mexico — as well as rival China.
European Commission chief Jean-Claude Juncker vowed the bloc “will react firmly” to defend its interests.
“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” he said.
Canada and Germany both termed the tariffs “unacceptable”, with the German foreign minister Sigmar Gabriel urging Trump to reconsider.
– ‘Unacceptable’ –
Trump has long threatened to impose tariffs on steel and aluminum, accusing other countries of dumping and deploying “unfair” trade practices.
He has been particularly critical of China, although steel and aluminum each account for less than one percent of the country’s total exports to the United States.
Beijing Friday urged the US to “exercise restraint” and respect international trade rules.
“If all countries followed the example of the United States, (it) will undoubtedly result in a serious impact on the international trade order,” foreign ministry spokeswoman Hua Chunying said at a regular briefing.
The timing of Trump’s announcement was provocative for China: its top economic envoy Liu He was in Washington, holding meetings at the White House on Thursday.
“They candidly exchanged their views, building the necessary conditions for the next step in deepening cooperation,” Hua said of the meetings with US officials.
China has previously warned it was ready with counter-measures should the Trump administration deploy tariffs, but the foreign ministry did not indicate Friday that any such moves were in the works.
The White House has embarked on a campaign to renew American infrastructure, with steel likely a major input.
But Trump’s announcement has faced significant domestic opposition, including within his own White House and the Republican party.
US automakers, oil and gas producers and other industry groups have publicly urged the president to not impose new barriers on metal imports, warning the measures could jack up prices and invite reprisals, harming the US economy.
– ‘Danger is contagion’ –
Sources familiar with Trump’s decision say he faced stern opposition from aides, including top economic advisor Gary Cohn, who argued the move could ultimately damage US industry.
But trade hawks like Peter Navarro, who was by the president’s side as he made his remarks, appeared to have won the day.
The same sources said it was not impossible that carve-outs follow, making the measures more palatable to the EU, Canada and South Korea.
Trump’s decision — which leans on a rarely-used trade provision allowing protections for national security — could hit other countries far more than China, which is the world’s largest steel producer but accounts for less than one percent of US imports.
Steel producers in Canada, Brazil, Mexico, South Korea and Turkey rely far more heavily on the US market.
The US Commerce Department said last month that the global glut of steel and aluminum threatened US national security, and presented the White House with a set of options, including quotas, tariffs targeting specific countries, and across-the-board tariffs on all imports of the metals.
Trump’s proposal most closely resembled the last option.
Analysts said that while there were initial sharp stock market losses in the steel and aluminum sectors following the announcement, the main fear was what it could mean in the future.
“We think overall, the danger is contagion — the reaction — rather than the actual tariffs themselves,” Fat Prophets resources analyst David Lennox told AFP.
The benchmark Dow Jones Industrial Average lost 1.7 percent on Thursday and Asian markets quickly followed suit, with Tokyo closing 2.5 percent down and Hong Kong falling 1.5 percent Friday. (AFP)