Trump Announced Steel and Aluminum Tariffs
by Stephen Lendman (stephenlendman.org - Home - Stephen Lendman)
An earlier article, I asked if Trump intends waging trade war, notably against China.
In late January, his administration announced 30% tariffs on imported solar panels and modules, declining over a four-year period to 15%.
Stiff tariffs on imported washing machines and parts were also imposed – 20% (for the first 1.2 million units, 50% above this total) and 50% respectively for year one, reduced to 16% (40% above 1.2 million units) and 40% respectively by year three.
On Thursday, Trump announced imported tariffs of 25% on steel, 10% on aluminum, aimed at China, the world’s largest producer of these commodities.
The announcement came at a time its top economic official Liu He (expected to be named financial and industrial policy vice premier) is in Washington, discussing bilateral trade and economic relations with Treasury Secretary Mnuchin and National Economic Council director Gary Cohn.
On Friday, China’s Foreign Ministry spokeswoman Hua Chunying slammed what she called US “protectionist tools.”
Head of Beijing’s Ministry of Commerce’s Trade Remedy and Investigation Bureau Wang Hejun said US tariffs on steel and aluminum will “seriously damage multilateral trade mechanisms represented by the World Trade Organization, and will surely have a huge impact on the normal international trade order,” adding:
“…China will work with other affected countries in taking measures to safeguard its own rights and interests.”
America imports only 3% of foreign produced steel from China, 16% from Canada. Prime Minister Trudeau called the proposed tariff “absolutely unacceptable.”
European Commission President Jean-Claude Juncker said “(i)f the Americans impose tariffs on steel and aluminum, then we must treat American products the same way,” adding:
“We must show that we can also take measures. This cannot be a unilateral transatlantic action by the Americans.”
Chinese specialist Andrew Mertha warned that protectionist US policies could derail $250 billion worth of bilateral trade announced when Trump visited Beijing last November.
American International Automobile Dealers Association president Cody Lusk said proposed US steel and aluminum tariffs “couldn’t come at a worse time.”
“Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America.”
Various US companies warned of higher prices if Trump announced tariffs are imposed, affecting consumer goods, hi-tech, aerospace, oil and gas, machinery, construction, and other US industries.
Retaliation would hurt American companies. Protectionism cuts both ways.
World Trade Organization (WTO) director-general Roberto Azevedo expressed concern about Trump’s proposed tariffs, saying “(t)he WTO will be watching the situation very closely…A trade war is in no-one’s interests.”
China’s Global Times (GT) responded sharply to Trump’s new tariff announcement, calling his proposal an “obvious violation of WTO rules,” adding:
“(T)his plan will spark retaliation from the affected countries and inflate the cost for US construction material enterprises and automakers, which will eventually hurt US consumers.”
GT calls proposed Trump administration tariffs a “21st century economic Great Wall.”
In 2002, Bush/Cheney administration tariffs on imported steel proved a jobs-killer, protecting one industry at the expense of others.
In 2003, tariffs were rescinded after the WTO ruled against them.
Smoot-Hawley legislation in 1930 launched a protectionist trade agenda at the onset of the Great Depression, making protracted hard times harder.
Most economists agree. The law exacerbated the 1930s period. It took WW II industrial production to end it.
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