Despite President Donald Trump’s promises to “be flexible” for “friends” of the US when considering exemptions to the steel and aluminum tariffs that the he’s planning to impose in two weeks, China – the explicit target of the taxes – and the European Union are not at all pleased – and they’re threatening retaliation, per RT.
In a response to today’s announcement, China’s Commerce Industry urged the US to withdraw the planned-for tariffs while threatening to take “strong measures” that could “seriously hurt the international trade order.”
Adding insult to injury, President Trump boasted on twitter that trade wars are “good and easy to win,” triggering an outraged response from Donald Tusk, president of the European council, who responded, saying the truth is trade wars are “bad and easy to lose” and that the EU’s goal is to keep world trade alive and, if necessary, to protect Europeans with a “proportionate response.”
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
President Trump said: ‘trade wars are good and easy to win’. But the truth is trade wars are bad and easy to lose. EU’s goal is to keep world trade alive and if necessary to protect European by proportionate responses.
— Donald Tusk (@eucopresident) March 7, 2018
EU Trade Commissioner Cecilia Malmström said thousands of jobs would be in jeopardy because of Washington’s import tariffs. In response, Europeans have threatened to retaliate by targeting US products such as whiskey, peanut butter, orange juice and motorcycles in retaliation, a group of products that amounts to $3.5 billion in trade annually.
Earlier in the week, China’s Foreign Minister Wang Yi warned that trade wars “harm the initiator,” according to the Guardian.
“As for our trade frictions, history teaches that trade war is never the right solution. In a globalized world it is particularly unhelpful as it will harm the initiator as well as the target country,” China’s Foreign Minister Wang Yi said.
“Given today’s globalization, choosing a trade war is a mistaken prescription. The outcome will only be harmful,” he added on the sidelines of an annual meeting of the national parliament. “China would have to make a justified and necessary response.”
Beijing said nothing about how, exactly, it would retaliate for curbing its metals trade with the US, but, as RT reports, US products like soybeans, aircraft and cars present likely targets for counter-tariffs. However, China has previously used its economic heft to punish US allies. Last year, China lashed out at the South Korean tourism and retail industries after Seoul agreed to host American anti-ballistic missiles on its territory, a move that Beijing described as a threat to its national security.
While the US only imports a small percentage of its steel from China (if one looks at the official data), the country’s rapid growth and debt-fueled expansion of its industrial sector have caused a worldwide glut of steel thanks to trans-shipping (or cheating as Navarro and Trump would say).
South Korean officials also expressed regret at the US tariffs, adding that they would probably inhibit Korean steel exports. The US said it would make exceptions for Mexican and Canadian steel and aluminum while Nafta negotiations are ongoing…
The Japanese struck a more amenable tone, with Finance Minister Aso said he’d work to get Japanese companies excluded from the tariffs. Though he added that the measures are “extremely regrettable” and that they would have a “big effect” on the global economy, according to Bloomberg.
While Trump prepares to implement the “negotiable” tariffs, plenty of Republicans, Democrats and other critics in the domestic economy are doing everything they can to kill the tariffs. Several US states are also bracing for tariffs, including Connecticut and Louisiana, which are among the states that will be hit the hardest.