Trump tariffs order risks world trade war

The US President carried out his threat to impose taxes of 25% on steel and 10% on aluminium products, starting in 15 days’ time, despite deep unease over the action in Washington even .

Leading Republican Paul Ryan is among those who have denounced the move.

“I disagree with this action and fear its unintended consequences,” he said, while welcoming temporary exemptions given to Mexico and Canada.

“We will continue to urge the administration to narrow this policy so that it is focused only on those countries and practices that violate trade law.”

At a news conference to announce the measures, Mr Trump said he was acting to protect “special people” in US industry who had fallen victim to “unfair dumping” practices from abroad for decades.

He insisted it was a national security issue as US manufacturers had struggled for too long against a tide of cheap products from abroad – reducing their competitiveness.

The result, he argued, had been a “decimation” of US communities from a sustained “assault”.

It remained unclear if the EU, including Britain, would be targeted as Mr Trump said “flexibility and co-operation” would be shown to friendly countries linked, in part, to military co-operation.

The bloc had already threatened reprisals in the event of tariffs being imposed, warning it would respond to higher charges with tit-for-tat measures on including jeans, orange juice and even Harley Davidson motorbikes.

Steel worker
Video:UK Steel warns on trade war consequences

Meanwhile, trade body UK Steel said the tariffs could have a “profound and detrimental impact” and the Community union called for action to protect British jobs and avoid a “global trade war”.

In a statement, the Government said it had been “clear that tariffs are not the right way to address the global problem of overcapacity”. It said the issue required a “multilateral solution”.

The spokesperson added: “We will work with EU partners to consider the scope for exemptions outlined today and continue to work with all the sectors involved in this decision to robustly support our industries and demonstrate the importance of their high-quality products for US industries and security.”

Trade minister Liam Fox said it was the “wrong” approach to trade issues.

He said: “We can deal multilaterally with the overproduction of steel but this is the wrong way to go about it.

“Protectionism, tariffs never really work.”

China had also urged the White House to avoid a damaging trade war – saying it would have to make a “necessary response” if tariffs were imposed.

US officials confirmed Canada and Mexico, currently in the middle of trade negotiations with the US, were among a handful of nations to be spared the extra costs – for now, at least.

They added that other countries could join them in being exempt but only if they offered “alternative ways” to address the threat posed to US jobs.

The President demanded change – giving an example that China currently imposed 25% tariffs on US-made cars while vehicles produced in China for the US market had a tax rate of just 2.5%.

“We just want fairness,” he said.

The developments were largely expected by financial markets – which responded relatively calmly to confirmation of the tariff plan.

The pound even rose slightly against the dollar – back above $1.38 – perhaps on the signal that friendly nations, with military ties to the US, could be spared the worst.

US stock markets, which had originally been spooked by the plan, closed in positive territory while steel and aluminium prices on commodity exchanges were stable.

Gareth Stace, the director of industry group UK Steel, responded: “Such tariffs would have a profound and detrimental impact on the UK steel sector, which exported some 350,000 tonnes of products to the US in 2017, over 7% of its total exports.

“The UK sector is in the midst of a fragile recovery following years of considerable turmoil, it would be utterly devastating if this were to be undermined.”

Donald Trump has fired the starting gun on what could become a world trade war by officially ordering tariffs on US imports of steel and aluminium.