Trump to impose steep tariffs on steel and aluminum, stokes trade war fears

[The-Hack]

President Donald Trump announced on Thursday he would impose hefty tariffs on imported steel and aluminium to protect US producers, risking retaliation from major trade partners like China, Europe and neighbouring Canada.

Fears of a trade war triggered a selloff on Wall Street.

Trump said the duties, 25 percent on steel imports and 10 percent on aluminium, would be formally announced next week, although White House officials later said some details still needed to be ironed out.“We’re going to build our steel industry back and our aluminium industry back,” Trump said.

While American steelmakers lost three-quarters of their jobs between 1962 and 2005, a major study by the American Economic Association showed that much of this reflected improved production technology, with output per worker rising fivefold.

“Thus, even if trade protection leads to increased domestic production, increases in employment may be far less than many hope,” a report from the independent Econofact economist network said last week.

“Across many states, the number of jobs adversely affected in these steel-using industries could far exceed any steel jobs saved,” Econofact warned.

The overall impact on the U.S. economy is likely to be muted, barring a major trade war, with steel and aluminium imports accounting for just 2 percent of the overall total.

China has already threatened to curb imports of U.S. soybeans, and the European Union has said it will consider action as well. President Xi Jinping’s top economic adviser, Liu He, held talks with the Trump administration in Washington on Thursday.

The discussion was described as“frank and constructive,” by a White House official, and focused on “ways to ensure fair and reciprocal trade.”

Trade tensions between the United States and China have risen since Trump took office in 2017.

Washington is already engaged in a dispute with Canada and Mexico over its proposed revision to the North American Free Trade Agreement, and months of tense talks have failed to produce any meaningful progress.

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