World News

Nations Threaten Retaliation for Trump’s Steel Tariffs Plan

Posted March 2, 2018 2:27 p.m. EST

BERLIN — The European Union, Germany, Canada and other nations have threatened retaliation against the United States after President Donald Trump vowed to slap tariffs on steel and aluminum imports.

Denunciations flowed in Friday from governments, lawmakers, metals makers and labor unions.

Steffen Seibert, a spokesman for the German chancellor, Angela Merkel, said Friday that the government “rejects” the tariffs, adding that such measures could lead to a global trade war, which “can’t be in anyone’s interest.”

Hans Juergen Kerkhoff, president of the German Steel Federation, said Friday:

“These measure clearly violate the rules of the World Trade Organization. If the EU does not react, our steel industry will pay the bill for U.S. protectionism.”

He called on the bloc to take action, through the World Trade Organization.

Simon Clarke, a Conservative member of Britain’s Parliament and vice chairman of the All Party Parliamentary Group on Steel and Metal Related Industries, wrote on Twitter on Friday:

“Tariffs are the worst possible option for the world economy and a major threat to U.K. steel in particular.”

Roy Rickhuss, general secretary of Community Union, a British labor union, also denounced the move on Twitter:

“Donald Trump is putting jobs at risk on both sides of the Atlantic. Thousands of steelworkers across the country voted for Brexit on the promise it would deliver a new era of international trade.”

He called on Prime Minister Theresa May to ensure that steel products exported by Britain were exempt from the proposed tariffs.

The global reactions hinted at a looming trade war if Trump followed through on campaign promises of an “America First” trade policy. He told industry executives Thursday that he planned to levy penalties of 25 percent on steel imports and 10 percent on aluminum imports from all countries.

On Friday, the president doubled down on his promise in a Twitter post: “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.”

He added later, “If you don’t have steel, you don’t have a country!”

Pressed for reaction to Trump’s first tweet, which was sent in the course of a regular weekly government news conference, Seibert declined to comment, except to say, “The German government has not changed its position in the past 18 minutes.”

The White House has said that the tariff details remain to be worked out, and Seibert said the German government was awaiting the exact details before assessing the scope of the impact.

But Germany made clear that Berlin viewed such measures as damaging to the country’s steel industry. Foreign Minister Sigmar Gabriel said he viewed the proposal with “great concern” and defended his country’s practices in the industry.

The United States is the most important export country for German rolled steel products and the second-most important destination for the European Union, after Turkey, according to official government statistics.

Gabriel said. “Such a sweeping blow from the U.S. would reverberate around the world, but our exports and jobs would be among the hardest in the world hit.” Dieter Kempf, head of the Federation of German Industries, warned that Trump was risking a “spiral of protectionism” that in the end would cost U.S. jobs, as well as those in Germany and the rest of Europe.

But Kempf urged everyone to “keep a cool head” in an effort to avoid feeding the flames of a global trade war.

Bruno Le Maire, the French economy minister, said in reaction to the Trump administration’s plans on tariffs, “These unilateral measures are not acceptable.”

Le Maire, speaking to reporters in Paris, said the tariffs would have a “major impact” on the European economy and on a number of French companies. He said that the steel and aluminum industries were in a “particularly fragile” situation and that certain countries practiced “dumping” and “massive subsidies” that distorted trade.

“American authorities know this perfectly well,” he said. “That is the topic that needs to be addressed, and not another.”

He called for “a common European and American response,” adding, “A trade war between Europe and the United States will only result in losers.”

Le Maire said he would discuss the issue with his European counterparts in the coming days and weeks.

Officials around the world have been voicing varying degrees of dismay and anger since the proposal was unveiled Thursday.

Jean-Claude Juncker, president of the European Commission, said: “We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk.

Canada’s foreign minister, Chrystia Freeland, said Thursday, “Canada will take responsive measures to defend its trade interests and workers.”

The United States has much to lose in a metals trade war with Canada, crucial strategic ally and major trading partner, Freeland said. She noted that the United States has a steel trade surplus with its northern neighbor, which is both the largest buyer of U.S. steel and the largest seller of steel to the United States.

Australia’s trade minister, Steven Ciobo, said Friday that Trump’s action would spark retaliatory measures that would hurt everyone. “The imposition of a tariff like this will do nothing other than distort trade and, ultimately, we believe, will lead to a loss of jobs,” he said.

At a daily briefing, a Chinese Foreign Ministry spokeswoman, Hua Chunying, said, “China urges the United States to exercise restraint in using trade protectionism tools.”

But Li Xinchuang, vice chairman of the China Iron and Steel Association, was more blunt. In a phone interview Friday, he said: “I feel Trump’s decision is stupid. It will only make the U.S. steel industry, which is already 10 years behind China, more left behind.”

He added, “Trump’s decision does no good to everyone except a few American steel enterprises. Trump is a businessman, and he should understand win-win. But he took such extreme action.”

The countries hit hardest by the proposed tariffs would be Canada, Mexico, Brazil and South Korea, which together account for almost half of U.S. steel imports.

The United States is also a substantial market for Britain’s steel industry. In an emailed statement Friday, UK Steel, an industry group, said almost 15 percent of Britain’s steel exports or 360 million pounds ($496 million) a year went to the United States.

Richard Warren, the group’s head of policy, said in an email of the proposed tariffs: “This would be a unilateral and extremely blunt approach to what is a complex global problem of overcapacity in the steel sector.”

ArcelorMittal, the world’s biggest steel maker and the largest steel producer in Europe and the United States, said it was assessing the possible impact of Trump’s proposal. ArcelorMittal employs 80,000 people at 400 sites in Europe and about 18,000 workers at 17 sites in the United States.

In a sign of the potentially adverse effects that Trump’s plan may have on the U.S. economy, Electrolux, a global maker of household appliances, said Friday that it would delay a planned $250 million investment to expand and modernize a factory in Tennessee.

“We’re concerned about the impact that the tariffs could have on the competitiveness of our U.S. operations,” the company said in a statement, adding it would seek more details of Trump’s plan before deciding whether to move forward.

In what was considered a rare comment on a member’s trade stance, Roberto Azevêdo, the World Trade Organization’s director general, said in a statement: “The WTO is clearly concerned at the announcement of U.S. plans for tariffs on steel and aluminium. The potential for escalation is real, as we have seen from the initial responses of others.”

He added: “A trade war is in no one’s interests. The WTO will be watching the situation very closely.”