Trump's trade war will have global impact

Gladys Abbott
March 12, 2018

The order slaps tariffs on steel and aluminum imported from any foreign country, with the exception of Canada and Mexico, which the order says will remain exempt "at least at this time". "The equipment manufacturing industry is profoundly disappointed at President Trump's actions today to advance import tariffs on steel and aluminum".

Trump's impromptu announcement last week that he meant to slap 25 percent taxes on steel imports and 10 percent on aluminum revived the specter of a trade war between the United States and major trade allies like Canada, a leading steel supplier.

Canada and Mexico will be exempt, and other countries can apply for exemptions. "And I think in the end we're going to have a lot of great jobs, could have a lot of great companies all coming back into our country".

The president suggested in the meeting with his Cabinet that Australia and "other countries" might also be spared, a shift that could soften the worldwide blow amid threats of retaliation by trading partners.

"He expressly acknowledged the points that we've made, about the important relationship with Australia, the very strong friendship, and of course the fact that America has a surplus in its trade with Australia", Mr Turnbull told reporters in Sydney on Friday. Australian steel exports to the U.S. are less than 0.1% of GDP but the prospect of local exporters losing the United States market was a source of concern.

"In addition, the tariffs if imposed on steel and aluminum from key trading partners will likely lead to retaliation in the form of higher tariffs on US exports which could escalate into a trade war that nearly all economists agree would have a very negative impact on the global economy", Peck said.

Trump's confirmation that there is room from exemptions is a significant weakening of the administration's position on the weekend. In fact, as recently as 1 p.m., trade staffers in key congressional offices still had not been briefed on the White House tariff plan. You don't have steel.

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On Wednesday, at the WTO, China led a group of 18 members urging Trump to scrap the planned tariffs, with its representative saying the levies would pose a systemic threat to the rules-based global trading system.

Mr. Trump has long called for fairer trade deals and argues that the tariffs are necessary to safeguard the nation's struggling steel and aluminum against less expensive foreign imports.

"If we reach a deal it is most likely that we won't be charging those two countries the tariffs", he said, adding that Australia would also be spared.

"We're on the verge of a painful and stupid trade war, and that's bad", he added. "We are sending a mutual signal that we recognise the policy orthodoxy of trade". In place are temporary exemptions for Canada and Mexico as he seeks to revise the North American Free Trade Agreement.

Confusion reigned in Washington overnight, with contradictory reports sparking a "will he or won't he" guessing game as Trump's leanings seemed to change by the hour.

Trump's declaration coincided with the signing by 11 countries of a new Trans-Pacific trade pact that the United States withdrew from previous year.

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