Wednesday , October 28 2020
Home / Business / Trump tariffs have world traders steeling for conflict
Covid-19 Image

Trump tariffs have world traders steeling for conflict

Paris, France | AFP | By opting to place heavy tariffs on imports of steel and aluminium, US President Donald Trump is on the surface hoping to protect jobs at home.

Yet his policy threatens not only to frustrate trade partners but also cost US workers dear, many analysts as well as global trade bodies fear.

Trump says he will impose next week 25 percent tariffs on steel imports and 10 percent on aluminium in a policy move that has caused consternation around the world, from the European Union to Canada via China.

Steel dumping has been a source of global trade friction for some years but Trump has framed his policy as a matter of economic and national security.

This is “because globally there is over capacity in steel, and jobs are concentrated in areas that have suffered from deindustrialisation,” said Nigel Driffield, professor of international trade at Britain’s Warwick Business School.

The importance of steel and aluminium in international commerce derives notably from their use in crucial economic sectors such as construction and infrastructure as well as the automobile industry, but also beyond — for instance, aluminium drinks cans.

– Canada, Brazil, Korea –

“Also, in the west there is a tension between those that produce steel, typically in Europe with high energy prices, and those that use steel who are happy to buy cheaper steel from Asia,” said Driffield.

Last year, the United States imported 35.6 million tonnes of steel — equivalent to some 36 percent of the country’s consumption, worth $33.6 billion, according to analysts from Wood Mackenzie.

Yet China, the world’s top steel producer, accounted for a mere 2.9 percent of US imports — and only 1.4 percent of overall Chinese exports of the metal totalling 74.82 million tonnes.

“Thus, the steel tariffs will not have much impact on Chinese steel exports and China does not have as much to lose as the traditional US trading partners,” noted Wood Mackenzie senior analyst He Ming.

“The proposed protection measures will have more negative impact on steel imports from Canada, Mexico and Brazil. South Korea, the largest source of US imports from Asia, will be heavily hit if the US imposes steel tariffs,” he added.

Leave a Reply

Your email address will not be published. Required fields are marked *