Trump eager for “trade war” despite steel tariff backlash
Donald Trump’s announcement Thursday that he planned to implement a 25 percent tariff on imported steel products had an immediate impact, with many manufacturing sector associations forcefully condemning the plan, along with key trading partners, Republican politicians, and unrelated exporting industries concerned about retaliation.
In response to the criticism, Trump tweeted Friday that “trade wars are good, and easy to win.”
The rest of the US economy might not agree, as the Dow Jones Industrial average plummeted over 400 points on Thursday and fell another 300 points in early trading Friday. Additionally, previously-planned investments in the US manufacturing sector are reportedly on hold until the tariffs are signed into law, which Trump plans to do sometime next week.
Electrolux, Europe’s largest home appliance maker, announced Friday that it would delay a planned $250 million investment in its Springfield, Tennessee plant, because “We believe that tariffs could cause a pretty significant increase in the price of steel on the US market,” according to a media report quote by Electrolux spokesman Daniel Frykholm.
Electrolux said it buys all the steel it uses in its US products from US domestic steelmakers, who have been raising prices on nearly all steel products in the last few months ahead of the Section 232 decision.
Elsewhere outside the US, countries including Germany, Australia, China, and others threatened to take action against the US if the tariffs are formally implemented. Steel tariffs against Canada, which accounted for 16.5 percent of US steel imports and 59.4 percent of US steel exports in 2017, will likely affect ongoing NAFTA renegotiations, according to Unifor, the country’s largest private sector union.
In a press release, Unifor said that if Canada fails to obtain an exemption from the proposed tariffs, the Canadian government has “no choice” but to withdraw from NAFTA renegotiations.
“It’s clear the US is using tariffs as a trade weapon,” said Renaud Gagné, Unifor Quebec Director, in a statement. “It’s no accident that these duties were announced while NAFTA talks are underway. The federal government must stand and fight, here and now, against this threat by the US government and supporting stakeholders.”
Countries concerned with the tariffs are expected to appeal to the World Trade Organization, which offered a rare public comment on the matter.
“The WTO is clearly concerned at the announcement of US plans for tariffs on steel and aluminum. The potential for escalation is real, as we have seen from the initial responses of others.,” said Roberto Azevêdo, WTO director general, in a statement to the New York Times. “A trade war is in no one’s interests. The WTO will be watching the situation very closely.”