ZCZC
BCN-01
US-ECONOMY-CHINA-TRADE-TRUMP-TARIFF
Defiant Trump welcomes ‘easy to win’ trade war
WASHINGTON, March 3, 2018 (BSS/AFP) – US President Donald Trump on Friday
welcomed the prospect of a trade war, remaining defiant in the face of the
global uproar sparked by his sudden announcement of steel and aluminum
tariffs.
With global stock markets tumbling and allies riled, the president greeted
the negative reaction by raising the stakes and vowing even harsher trade
policies.
In a blistering series of morning tweets, he said he would seek to impose
“reciprocal taxes” on all imports from trading partners that charge duties on
American exports.
That would ratchet up the administration’s confrontational “America First”
trade policy far beyond the hefty steel and aluminum tariffs he announced
Thursday — which come despite strenuous objections from stunned advisors and
powerful industry groups.
The wide-ranging actions, if imposed, would eviscerate the rules-based
global trading system the US helped to build, and drastically raise the
chances of a trade war.
But in an early morning tweet Trump seemed to welcome the prospect, saying
“trade wars are good, and easy to win.”
– ‘Reciprocal taxes’ –
Allowing imports into the US market duty free when similar exports face
tariffs is “not fair or smart,” Trump said on Twitter.
“We will soon be starting RECIPROCAL TAXES so that we will charge the same
thing as they charge us. $800 Billion Trade Deficit-have no choice!”
He also defended his decision Thursday to impose 25 percent tariffs on
steel imports and 10 percent on aluminum.
“IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!” Trump said in another
tweet Friday.
And while some allies, like Canada, had hoped to be spared the tariffs, a
senior administration official said Friday that Trump had ruled out allowing
countries to be exempted, which could inflame tensions even further.
MORE/HR/0930
ZCZC
BCN-02
US-ECONOMY-CHINA-TRADE-TRUMP-TARIFF 2 LAST WASHINGTON
Already on a shaky footing, Wall Street stocks split on Friday, with the
Dow closing down 0.3 percent but the Nasdaq up one percent after investors
came in looking for technology bargains.
Officials were caught flat-footed by Trump’s announcement Thursday, and
the White House had not even completed a legal review of the proposed
tariffs, officials told AFP.
Economists say tariffs such as those Trump proposes will hurt the US
companies and workers he has said he wants to protect. The US is the world’s
largest steel importer and the move could jack up costs for crucial inputs
for infrastructure and industries that are major employers.
– ‘Biggest policy blunder’ –
An editorial in the conservative Wall Street Journal typified the dismay
of industry advocates, calling the tariffs the “biggest policy blunder” of
Trump’s young presidency and “self-inflicted folly.”
Commerce Secretary Wilbur Ross leapt to the president’s defense, holding
up cans of Budweiser, Coca-Cola and Campbell’s Chicken Noodle soup during an
appearance on CNBC and arguing that ordinary consumer goods would see little
increase in price.
But Sherrie Rosenblatt, vice president and spokeswoman for the Can
Manufacturers Institute, told AFP the value of metal in an individual item
did not reflect the true burden tariffs would create for can manufacturers
and users.
Trump’s most frequent whipping post on trade, China, called on the US to
exercise “restraint,” warning that the tariffs could prompt reprisals and
have “a serious impact” on the global trade order.
The European Commission vowed to “react firmly” while Canada and Germany
each called the tariffs “unacceptable,” with Germany urging Trump to
reconsider.
– Helping a few, hurting many? –
“When you have the president of the United States going on the record and
saying trade wars are good and they’re easy to win, I shudder to think what
that even means,” Rufus Yerxa, president of the National Foreign Trade
Council, told AFP.
Trump’s decision 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.
Major players in the US metals industry and their workers, who have long
complained of dumping, overcapacity and subsidies by competing producers,
would be the obvious beneficiaries.
But analysts say a far larger share of US industry and economic activity
would be exposed to higher prices, weighing on growth and employment.
Recent official figures show about 140,000 Americans work in US steel
mills, generating about $36 billion in economic activity, or about 0.2
percent of GDP. But steel-consuming industries employ 6.5 million Americans
and add about $1 trillion to GDP.
In 2002, then-President George W. Bush imposed steel tariffs that caused an estimated 200,000 in job losses and cost nearly $4 billion in lost wages. The administration backtracked a less than two years later after it lost a dispute before the World Trade Organization.