Trump Metal Tariffs Kick in as Global Trade War Looms

SEATTLE (Scrap Monster): President Donald Trump's increased tariffs on all U.S. steel and aluminum imports took effect on Wednesday, stepping up a campaign to reorder global trade in favor of the U.S. and drawing swift retaliation from Europe.

Trump's action to bulk up protections for American steel and aluminum producers restores effective global tariffs of 25% on all imports of the metals and extends the duties to hundreds of downstream products made from the metals, from nuts and bolts to bulldozer blades and soda cans.

Trump's hyper-focus on tariffs since taking office in January has rattled investor, consumer and business confidence in ways that economists worry could cause a U.S. recession and further lag on the global economy.

The European Commission, the executive arm of the European Union charged with coordinating trade matters, responded swiftly, saying it would impose counter tariffs on 26 billion euros ($28 billion) worth of U.S. goods from next month.

"We are ready to engage in meaningful dialogue," Commission President Ursula von der Leyen told reporters, adding she had tasked Trade Commissioner Maros Sefcovic to resume his talks to "explore better solutions with the U.S.".

"We firmly believe that in a world fraught with geoeconomic and political uncertainties, it is not in our common interest to burden our economies with such tariffs."

China's foreign ministry said Beijing would take all necessary measures to safeguard its rights and interests, while Japan's Chief Cabinet Secretary Yoshimasa Hayashi said the move could have a major impact on U.S.-Japan economic ties.

Close U.S. allies Canada, Britain and Australia criticised the blanket tariffs, with Canada mulling reciprocal actions and Britain's trade minister Jonathan Reynolds saying "all options were on the table" to respond in the national interest.

Australian Prime Minister Anthony Albanese said the move was "against the spirit of our two nations' enduring friendship" but ruled out tit-for-tat duties.

"Tariffs and escalating trade tensions are a form of economic self-harm, and a recipe for slower growth and higher inflation," he told reporters.

The countries most affected by the tariffs are Canada, the biggest foreign supplier of steel and aluminum to the U.S., Brazil, Mexico and South Korea, which all have enjoyed some level of exemptions or quotas.

Trump initially threatened Canada with doubling the duty to 50% on its steel and aluminum exports to the U.S. but backed off after Ontario province suspended a move to impose a 25% surcharge on electricity exports to the states of Minnesota, Michigan and New York.

That incident whip-sawed U.S. financial markets already jittery over Trump's broad tariff offensive. Asian markets were broadly steady on Wednesday, although Australia's benchmark closed 9.6% below February's record high.

Courtesy: www.reuters.com