Updated
A day after announcing steep tariffs on imports of steel and aluminium, US President Donald Trump has tweeted that "trade wars are good, and easy to win".
Key points:
- Economists say the impact of price increases would destroy more jobs than curbs on imports create
- Fears of an escalating trade war triggered selloffs on Wall Street, Asia and Europe
- Brussels will join other countries in challenging the measures at the WTO
Mr Trump said the United States would apply duties of 25 per cent on imported steel and 10 per cent on aluminium to protect US producers, although White House officials later said some details still needed to be ironed out.
"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," Mr Trump tweeted.
"Example, when we are down [$129 billion] with a certain country and they get cute, don't trade anymore — we win big. It's easy!"
Fears of an escalating trade war triggered selloffs on Wall Street and in Asia and Europe, hitting the share prices of steelmakers and manufacturers supplying US markets particularly hard.
Mr Trump believes the tariffs will safeguard American jobs, but many economists say the impact of price increases for users of steel and aluminium, such as the auto and oil industries, will destroy more jobs than curbs on imports create.
Australia's trade minister said the measures risked triggering retaliation from other economies and could cost jobs.
"The imposition of a tariff like this will do nothing other than distort trade and ultimately, we believe, will lead to a loss of jobs," Australian trade minister Steven Ciobo told reporters in Sydney.
"My concern remains that on the back of actions like this we could see retaliatory measures that are put in place by other major economies. That is in no-one's interest."
Meanwhile, China predicted harm to trade if other countries followed the example of the United States.
"All countries steel and aluminium industries are facing difficulties," Chinese Foreign Ministry spokeswoman Hua Chunying told a regular briefing in Beijing.
"China urges the United States to show restraint in using protective trade measures, respect multilateral trade rules, and make a positive contribution to international trade order."
Tariffs to be challenged at the WTO
In Brussels, the European Commission called the step a blatant intervention that amounted to protectionism.
However, while promising to act "firmly", it made no mention of retaliation but instead spoke of counter-measures that conformed to World Trade Organisation (WTO) rules.
Brussels will join other countries in challenging the measures at the WTO and said it will also look into safeguard measures.
Germany also rejected Mr Trump's planned tariffs on steel and aluminium, a government spokesman said, adding that a trade war would be in nobody's interest.
"On the issue of a trade war: that cannot be in anybody's interest," German government spokesman Steffen Seibert told a regular government news conference in Berlin.
He said Germany would examine Mr Trump's decision and consider consequences.
Reuters
Topics: trade, international-aid-and-trade, business-economics-and-finance, industry, steel, world-politics, donald-trump, united-states
First posted