U.S hits allies with steel and aluminum tariffs. Trump accused of treating world trade as gunfight at the O.K. Corral.
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| A steel-worker is pictured at a furnace at the plant of German steel company Salzgitter. Photo: Reuters/Fabian Bimmer |
By Julian Kossoff, International Business Times
uropean political leaders reacted furiously as the Trump administration followed through on its threat to impose swinging tariffs on European, Canadian and Mexican steel imports in the opening shots of an unprecedented trade war.
Our response to 'America First' can only be: 'Europe United'," the German foreign minister Heio Maas said in a statement.
"We cannot understand the U.S. decision to impose punitive tariffs on steel and aluminum for the EU, and reject it. The EU is prepared to respond appropriately with corresponding countermeasures," he warned.
French economy minister Bruno Le Maire emphasised the European rage at Donald Trump's aggessive trade stance, remarking that "world trade is not a gunfight at the O.K. Corral."
Trump announced in March the United States would slap a 25 percent tariff on imported steel, and a 10 percent tariff on imported aluminum, citing national security interests. With hours to run out on the deadline, The White House made its move triggering a stock market sell-off with the Dow Jones diving 250 points.
The decision has put unprecedented strain on the post-war transatlantic alliance and the free trade ideology that has underpinned it since the end of World War Two.
Dec Mullarkey, managing director of investment research at Sun Life Investment Management, HQ’d in Massachusetts, said:
“The recent announcement by the US to allow temporary exemptions to expire and impose tariffs on steel and aluminum from Canada, the EU, and Mexico, creates heartburn for critical allies. The EU has been clear they will respond. This escalates the risk of a trade war and retaliatory steps that could put global growth at risk. This move shows that the US administration wants to send a clear message that they are willing to be protectionist even if they hijack the goodwill of long-term allies.”
Ben Digby, the international director of the Confederation of British Industry, that speaks on behalf of 190,000 businesses, said: “Overproduction can distort the global market and erode the level playing field that business depends on to stay competitive. But this is a shared challenge whose root causes should be tackled jointly by the EU and the USA. There are no winners in a trade war, which will damage prosperity on both sides of the Atlantic. These tariffs could lead to a protectionist domino effect, damaging firms, employees, and consumers in the USA, UK, and many other trading partners.
“We hope that the USA will swiftly reconsider its decision, and we will be pressing home the importance of our transatlantic relationship with our counterparts and government figures in Washington, London and Brussels in order to protect the free and fair trade that is the key to our economic future.”
Mexico says it will answer tariffs on steel and aluminum with duties of its own on a variety of U.S. products including pork bellies, apples, grapes, cheeses and flat steel among other things.
The European Union indicated it will also target consumer, agricultural and steel products in many key Republican constituencies.
Bloomberg reported that the iconic American products including Harley-Davidson motorcycles and bourbon whiskey could be hit with retaliatory trade tariffs, pressuring Republican speaker of the House of Representatives Paul Ryan, whose political base in Wisconsin is home of the motorcycle maker, and Senate Majority Leader Mitch McConnell, from Kentucky, where the whiskey is made.
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