Despite fierce opposition from inside the White House, US President Donald Trump on Thursday announced punishing steel and aluminum tariffs, teeing up a possible trade war with major producers as well as China.

Trump ended rumor and counter-rumor about his administration's intentions, by saying that "next week" he would sign off on measures designed to protect US producers.

Meeting at the White House with industry representatives, Trump announced tariffs of 25 percent on steel and 10 percent on aluminum, materials that are the lifeblood of the construction and manufacturing sectors.

"We're going to be instituting tariffs next week," Trump said, adding they will be in place "for a long period of time."

With Wall Street already uneasy, the news sent US stocks plunging with the benchmark Dow Jones Industrial Average losing as much as 2.3 percent.

Asia followed on Friday, with Tokyo, Hong Kong, Sydney and Seoul all sharply down in early trade.

The announcement was greeted with fury among key US allies such as Canada, the EU and Mexico.

Its timing is also provocative for China, coming as top economic envoy Liu He was Washington and holding meetings at the White House.

Beijing has previously warned it was ready with countermeasures should the Trump administration slap on tarrifs.

European Commission chief Jean-Claude Juncker said the EU "will react firmly" to defend its interests.

"The Commission will bring forward in the next few days a proposal for WTO-compatible countermeasures against the US to rebalance the situation," he said in a statement, referring to the World Trade Organization.

"We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk," he added.

- 'Unacceptable' -

Canadian Trade Minister Francois-Philippe Champagne responded even more bluntly, calling the tariffs "unacceptable."

"Any tariffs or quotas that would be imposed on our Canadian steel and aluminum industry would be unacceptable," Champagne told parliament. Any such decision would have an impact on both sides of the border."

He added that Canada "will defend our workers and our steel and aluminum industries."

The Mexican steel industry association Canacero, called on the Mexican government to "immediately respond in a reciprocal manner," unless the country's producers are excluded.

US automakers, oil and gas producers and other industry groups publicly urged the president not to impose new trade barriers on the metal imports, warning the measures could jack up prices and invite tit-for-tat reprisals, harming the economy.

The tariffs also come as the White House has embarked on a campaign to renew American infrastructure, with steel likely a major input.

Two agricultural groups, the National Association of Wheat Growers and US Wheat Associates, said in a joint statement they were "extremely disappointed" in the decision.

"It is dismaying that the voices of farmers and many other industries were ignored in favor of an industry that is already among the most protected in the country," the statement said.

Sources familiar with Trump's decision say he also faced stern opposition from aides, including top economic advisor Gary Cohn, who argued the move could ultimately damage US industry.

Up to the last moment, there were doubts about whether Trump would pull the trigger. But trade hawks like Peter Navarro -- a presidential aide who, after weeks on the sidelines, was by the president's side as he made his remarks -- appeared to have won the day.

The same sources said it is not impossible that the shock announcement is followed by carve outs that make the measures more palatable to allies in Europe, Canada and South Korea.

- Making steel great again? -

Trump said the action was aimed at addressing "phenomenal" cheating in the market.

"We'll have much more vibrant companies and then the rest will be up to management to make them truly great," he added. "If you could ever make US steel like it used to be, we would be very happy. I actually think it's possible."

Trump's decision, which leans on a rarely used trade provision allowing protections for national security, could also hit other countries far more than China, which has been the main target of the administration's trade anger.

China is the world's largest steel producer but accounts for less than one percent of US imports and sells only 10 percent of its wrought aluminum abroad. Steel producers in Canada, Brazil, Mexico, South Korea and Turkey rely for more heavily on the US market.

The Commerce Department said last month it determined 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, or across-the-board tariffs on all imports of aluminum and steel.

Trump's proposal most closely resembled the last option.

In testimony on Capitol Hill, newly-installed Federal Reserve Chairman Jerome Powell said he did not favor the use of tariffs to support those harmed by free trade.

"The tariff approach is not the best approach," said Powell.

"The best approach is deal directly with the people who are affected rather than falling back on tariffs."

A year of Trump's major trade policy moves
Washington (AFP) March 1, 2018 - President Donald Trump sparked fears of a trade war and sent markets reeling on Thursday when he announced steep new tariffs on imports of steel and aluminum.

The move to protect American industry from unfair trade practices was the latest salvo in Trump's "America First" trade agenda.

Below are his other major trade policy steps since taking office last year.

- Trans-Pacific Partnership -

Making good on a campaign pledge, Trump on his first full day in office withdrew from the 12-member trade pact negotiated by his predecessor.

He said the TPP -- which has yet to take effect but has been signed by participating nations -- left the United States exposed to unfair competition and was a bad deal. Trump's election opponent, Hillary Clinton, also opposed the deal.

But a year after taking office -- after the 11 other members signaled they would press ahead with or without Washington -- Trump struck a different tone, suggesting he would be open joining again if the United States won unspecified changes.

Treasury Secretary Steven Mnuchin said this week that high-level talks on this subject had begun, although other trade issues take precedence.

"I've met with several of my counterparts and other people who've begun to have high level conversations on TPP," he said. "It's not a priority at the moment but it's something the president will consider."

- NAFTA -

After denouncing the 24-year-old North American Free Trade Agreement as a "disaster" and the "worst trade deal maybe ever," Trump last year called for the pact to be renegotiated, but stopped short of withdrawing.

Delegates from Washington, Ottawa and Mexico City are currently attempting to retool the deal, but they have hit some serious stumbling blocks and the talks have been acrimonious in recent months.

Mexico and Canada oppose the American demand for higher requirements for US-made content in automobiles and the elimination of an important trade dispute mechanism.

The future of the agreement, which has seen sharp growth in trade but painful changes for certain industries, remains uncertain.

- Korea-US Free Trade Agreement -

Like NAFTA, Trump said the agreement with Korea, the sixth-largest US trading partner, is a "horrible" deal that should be renegotiated or scrapped entirely.

US and South Korean officials are currently in talks to revamp the 2012 pact, known as KORUS, which is now one of the only trade pacts still standing in the Pacific region since Trump withdrew from TPP.

- Dumping and subsidies -

The Trump administration has ramped up efforts to clamp down on dumping and unfair subsidies of foreign goods sold in the US market.

Commerce Secretary Wilbur Ross says he has doubled the cases compared to the prior administration. This has meant a steady drum beat of announcements of tariffs on goods from Chinese aluminum foil to Spanish olives to Vietnamese tool chests.

But even if the number of cases has increased, the estimated annual value of the imports involved is in line with actions taken in prior years, since the Trump administration has focused on smaller-ticket items, like Chinese carton-closing staples and Sri Lankan rubber bands.

The White House suffered a major loss last month when the independent US International Trade Commission blocked efforts to impose tariffs on about $5 billion in mid-size aircraft manufactured by Canada's Bombardier.

- Solar panels, washing machines -

Trump last month slapped tariffs of up to 30 percent on imports of solar panels over four years, and up to 50 percent on washing machines over three years, saying foreign-made goods had left US producers hanging by a thread.

The move largely impacted China and South Korea and again raised hackles among major industry players. The solar industry itself claimed the move would cause a "crisis" and cost thousands of jobs and billions in investment.

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

China factory expansion slows to 19-month low in February
Beijing (AFP) Feb 28, 2018
China's factory expansion slowed again in February as output and export orders dropped due to the Lunar New Year holidays, hitting a 19-month low, official data showed Wednesday. The manufacturing purchasing managers index (PMI), a gauge of factory conditions, came in at 50.3 in February, the National Bureau of Statistics (NBS) said, compared to 51.3 in January. Anything above 50 is considered growth while a figure below that points to contraction. The indicator fell short of the 51.1 readi ... read more