Trump plan on tariffs could lead to global trade war: WTO
The World Trade Organisation (WTO) has warned that US president Donald Trump is risking an economically damaging trade war if he goes ahead with plans to impose steep tariffs on steel and aluminium imports.
Mr Trump, who has long railed against what he deems unfair trade practices by China and others, said he planned to levy penalties of 25% on imported steel and 10% on aluminium imports from next week.
Even if new tariffs spark an international trade war, President Trump is confident the U.S. would come out on top. https://t.co/r9QEvO0fgL pic.twitter.com/uMCFL7jjE1
— CNBC (@CNBC) March 2, 2018
Roberto Azevedo, the director-general of the Geneva-based WTO, said the agency was clearly concerned at the US plans and warned that "a trade war is in no-one's interests".
"The potential for escalation is real as we have seen from the initial responses," he said.
Mr Azevedo said the WTO, the body that oversees global trade, "will be watching the situation very closely".
By taking on Mr Trump's remarks directly, Mr Azevedo is signalling a tougher stance toward the US leader. He has shown growing frustration in recent months over US efforts to block new appointments to the organisation's appellate body - a move that could hamper one of its key roles: resolving disputes.
The European Union is already thought to be considering retaliatory tariffs, roughly one third of which would target steel, one third agriculture, and one third other products.
JUST IN: Intl. Monetary Fund criticizes Trump's tariffs announcement, saying they "are likely to cause damage not only outside the U.S., but also to the U.S. economy itself" pic.twitter.com/qT3jYNqop6
— CNBC Now (@CNBCnow) March 2, 2018
European Commission chief Jean-Claude Juncker suggested the 28-nation trade could target typically American products such as Harley Davidson motorcycles, Bourbon whiskey and blue jeans.
"I don't like using the word trade war, but I can't see how this isn't part of war-like behaviour," Mr Juncker told German media ahead of a planned speech in Hamburg.
Fears of a trade war spread across Asia after Trump announced steel and aluminum tariffs https://t.co/RFRwGBGLMd via @ReutersTV pic.twitter.com/MjGkCk9tdt
— Reuters (@Reuters) March 2, 2018
French finance minister Bruno Le Maire confirmed he was planning to talk with counterparts in Germany and Britain about how to respond if the US imposes tariffs.
He said: "The United States must know that if these unilateral decisions were to be maintained and confirmed, they would lead to a strong, coordinated and united answer from the European Union."
In a tweet, Mr Trump said: "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".
In his run to the presidency, Mr Trump argued vociferously that increased foreign production, especially by China, had driven down prices and hurt US producers.
Financial markets have taken fright at the prospect of a trade war, with Germany's DAX index closing down 2.3% in Frankfurt, as investors fretted over the impact on Germany's export-heavy economy. German producers account for about 4% of US steel imports. European officials are arguing that EU firms would be unfairly punished by any blanket tariffs that emerge.
While not immediately offering a specific response to Mr Trump's announcement, the Chinese commerce ministry said: "The Chinese side expresses grave concern."
The ministry said Beijing has satisfied its trade obligations and appealed to Washington to settle disputes through negotiation.
Beijing faces mounting complaints that it improperly subsidises exports and hampers access to its markets in violation of free-trade commitments.
