thursday, 8 march of 2018

Trump pushes metal tariff plan, prompting fears for international trade

Donald Trump on Thursday looked set to push forward with plans to impose tariffs on steel and aluminium imports, a plan that threatens to undermine decades of detente in international trade.

The president will meet metal industry executives and workers at the White House on Thursday afternoon to discuss the controversial levies. Officials from China and Europe have threatened retaliation if Trump goes ahead with his plan.

“Looking forward to 3.30pm meeting today at the White House,” the president wrote on Twitter before the meeting. “We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military.”

Trump’s plan is to impose a 25% tariff on imports of steel, and a 10% tariff on aluminium. The initial plan was for a global levy, although it now appears that Australia, Canada and Mexico and other countries will be exempted. Other exceptions for some US companies may also be allowed.

The Trump administration has framed the tariffs as an issue of national security designed to protect US metal interests.

The White House trade adviser Peter Navarro, speaking on the Fox Business Network, said: “Look, this is pretty simple in this case. We’ve got an aluminum and steel industry. The president, quite clearly and correctly, [believes] we can’t have a country without those two industries. Fact of the matter of it, both of them are on life support – the aluminum industry in particular.”

Navarro went on: “In another year or two or three, if we don’t do anything, that’s going to be gone, and we’re not going to be gone, and we’re not going have a country.”

Trump promised on the campaign trail to protect US steelworkers’ jobs, but his plan was opposed by top economic adviser Gary Cohn, who – with the backing of many executives in other industries – argued that the impact on trade and on companies using cheap steel imports would outweigh any benefits of the tariffs.

Cohn resigned this week after just 14 months on the job, the latest in a series of high-profile departures from the Trump administration. “This is Gary Cohn’s last cabinet meeting,” Trump said on Thursday. “He’s been terrific. He may be a globalist, but I still like him. I have a feeling you’ll be back.”

More than 100 Republican House members signed a letter on Wednesday expressing “deep concern” about the plan. They pressed for Trump to change course and “avoid unintended negative consequences to the US economy and its workers”.

They added that “tariffs are taxes that make US businesses less competitive and US consumers poorer

As Republicans lobby the president to abandon his plan, Trump hasfound some support from his most reliable critics: Democrats.

“President Trump has identified the right opponent – China – much better than both the Obama and Bush administrations did,” Chuck Schumer, the Democratic leader in the Senate, said on Thursday, before Trump’s announcement. “Democrats and Republicans have been blind to this and President Trump isn’t.”

But Schumer urged Trump to tailor his plan so that it targets China and does not affect allies.

“Don’t swing blindly and wildly at our foe, China,” Schumer said. “Establish a well-placed jab at China. Set them back. Let them know we mean business.”

At a press conference in Frankfurt, Mario Draghi, the president of the European Central Bank (ECB), called unilateral tariff decisions “dangerous”.

He said: “What strikes me is whatever convictions you have about trade, we are convinced that disputes should be discussed and resolved in [a] multilateral framework.

“There is a certain worry or concern about the state of international relations, because if you put tariffs on your allies, one wonders who your enemies are.”

The news has also worried business leaders. On Bloomberg TV on Thursday, Jamie Dimon, the chairman of JP Morgan, said: “There are serious issues around trade. The WTO [World Trade Organisation] needs to get its act together and get a little more ambitious about fixing some of these problems, but I think tariffs is the wrong way to go about it.”

(Published by The Guardian - March 8, 2018)

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