The method to Trump's seeming tariff madness

US President Donald Trump and First Lady Melania Trump walk off Air Force One at Andrews Air Force Base Maryland

US President Donald Trump and First Lady Melania Trump walk off Air Force One at Andrews Air Force Base Maryland

Canada, Japan and South Korea, all US allies and major exporters of steel and aluminum, are asking for exemptions from the tariff hike, which Trump justified in part on national security grounds.

"We must show that we can also take measures".

He made the comments as the United States, Canada and Mexico were wrapping up their latest round of talks on revamping the 1994 NAFTA deal, and as world shares dipped again, partly on concerns that Trump's tariff plan could spark a global trade war.

"We are extremely anxious about the consequences of a trade war and are urging the White House to not advance with this plan".

President Trump's announcement that the US intends to impose 25% import tariffs on steel and 10% import tariffs on aluminum following the Departments of Commerce's section 232 review has been met with mixed reactions.

They are "safeguard" tariffs, a kind of emergency shield erected to stop a sudden, unforeseen and damaging import surge that could seriously damage a particular industry. Trump is justifying the tariffs in part on national security grounds. Many trade economists say Trump's zero-sum, "mercantilist" view of trade is misguided and that he is wrong to think trade deficits are always bad.

As CNBC observes, Canada would be hit particularly hard by the tariffs.

Trump's tweet helped push the Canadian dollar down to $C1.2988 to the USA dollar, the lowest level since July 7, 2017.

Steel and aluminum each account for less than one percent of China's total exports to the United States.

Trump's determination to push ahead with a 25 percent tariff on steel imports and a 10 percent duty on aluminum has prompted threats of retaliation from the European Union, Canada, China and Brazil among others.

It now looks impossible for negotiators to meet their goal of getting an agreement by the end of this month, especially amid the prospect of escalating trade tensions from the steel dispute.

"While Trump has at times lauded the relationship between the two countries and the prospect for a comprehensive trade deal, I don't think anyone is of the impression that he wouldn't derail this if the United Kingdom played an active role in counter-measures against U.S. industries", Erlam said.

A Commerce Ministry official said late Friday that Trump's plan to levy tariffs of 25 percent on steel and 10 percent on aluminum would "seriously damage multilateral trade mechanisms represented by the World Trade Organization and will surely have huge impact on normal global trade order".

Australia's steel industry is urging calm, saying the details of Trump's tariffs were yet to be seen.

Eight days of talks in Mexico's capital failed to make headway on new rules governing the content of products made in North America, which has been one of the most contentious issues in the talks. How is it that the hurting China's competitive edge in steel by taxing its allies? "This scenario would lead to the exact opposite outcome of the administration's stated objective, which is to protect American jobs", Walker's statement said.

The Trump administration has argued that it is imposing such a tariff under national security interests.

Latest News