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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2647

Slapping Tariff on Steel and Aluminium: “trade wars are good,” says President Trump

Hemantha Abeywardena writes from London...

President Trump appears to be determined to slap 25% and 10% tariff on steel and aluminium respectively despite the criticism – and warnings - from the allies and his own Republican Party. His critics see the move, in line with presidential campaign promises, could lead to potentially serious trade wars involving the nation affected and the US.

While dismissing the opinions of the critics, President Trump responded with a simple tweet: “trade wars are good.” It’s a simple way of saying that you need America and not vice versa.

If implemented in full, tariff on this scale would be a hammer blow for the nations that want to export steel to the US, especially at a time when there is a massive over-capacity in the global steel industry.

President Trump argues that the new tariff on steel and aluminium will reduce the flow of cheap steel to the US, that lead to the job losses. He also says that the proposed tariff will protect US companies; he also says that new manufacturing plants will be built, which in turn potentially create more jobs.

The news came, just a week after the announcement by the US Commerce Department that said the tariff on foreign goods was necessary to safeguard the national security – without spelling it out, of course.

While confirming the new tariff on steel and aluminium, the Trump administration made no distinction between friends and foes: for instance, he didn’t spare even the northern neighbour of the US, Canada. Nor did they spare its Asian allies. Instead, the administration left both friends and foes in a lurch.

Surprisingly, China maintains a mysterious silence on the issue, despite being the biggest steel exporter to the US. Canada and the EU, meanwhile, threatened with counter measures in the event of the tariffs being applied to the products in question.

Referring to the EU threat of counter measures, Mr Trump said any retaliatory measure by the EU will lead to the imposition of tariff on European cars to the US.

This is not the first time that the developed, Western nations tried to grapple with steel imports; in 2016, the EU was forced to apply up to 73% tariff on certain, selected, Chinese steel products, having come under immense pressure from struggling local steel companies. Unfortunately, that didn’t solve the problem.

Although, the US can justify the move as something necessary, slapping a tariff of this magnitude is going to affect the countries or individuals in a disturbing way: the exporters certainly will bleed; the US, however, needs something more than a miracle for not to be bruised with a risky exercise.

- Asian Tribune -

Slapping Tariff on Steel and Aluminium: “trade wars are good,” says President Trump
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