Trump tariff plan may spark 'undesirable chain reaction'

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Name SearchWatch Service' Philip Levy, a former trade adviser in President George W. Bush's administration, said the flaw in Trump basing his tariffs on national security was that military allies could ask to be excluded, undermining the president's stated goal of protecting domestic steel and aluminum mill jobs.

The action is created to protect the domestic steel industry from global overcapacity and depressed prices that experts blame on Chinese industrial policies.

Commenting on the USA policy, Canadian experts said while the temporary exemption granted to Canada will render Canadian-made steel and aluminum products a lower-price advantage, it is also a clear bargaining tool for Trump to pressure Canada in the ongoing NAFTA talks.

It was not immediately clear what type of document the president signed.

The White House has yet to announce the timing and extent of the planned tariffs. He signed separate proclamations ordering the tariffs.

With national security as the primary issue, it would be hard to apply the tax to South Korea and Australia, meaning that they could ultimately land on Russian Federation more than nearly any other country, said Levy, now at adjunct professor at Northwestern University.

"We have a very close relationship with Australia", he said.

Other world leaders expressed hope that deals would be made with the Trump administration to avoid tit-for-tat tariffs. The country's powerful industry body, the China Iron & Steel Association, has also urged Beijing to retaliate against the measures by taking action on American agricultural and other products.

President Donald Trump on Thursday imposed a 25 percent tariff on imported steel and a 10 percent tariff on aluminum imports, which are set to go into effect in two weeks. Moving to fulfil a protectionist campaign promise, Trump leaned on a little-used national security clause in USA trade law. The Department of Commerce, in cooperation with other agencies, will handle that process.

Paul Czachor, CEO of American Keg Pottstown, which manufactures beer kegs using only American-made steel, said he is very concerned with the tariffs. Higher domestic steel prices will lead to higher consumer prices for cars, appliances and new homes.

Most economists and trade specialists say they doubt the steel and aluminum tariffs alone would trigger a global trade war, but point to the risk of further US measures against China as a major tipping point.

"All of them will see an increase in their cost of doing business", Isely said.

But Labour's shadow trade secretary, Barry Gardiner, wrote to Dr Fox criticising his failure to address Parliament on the tariffs since they were first announced earlier this month.

As a result of the current steel and aluminum tariffs, local agriculture could see economic woes.

He warned suppliers may have to absorb the higher input prices by cutting their own costs and warned, generally, that "neither outcome is good for the industry".

If the American tariffs are put in place, Malmström said, the European Union could take three steps: take the case to the WTO; add safeguards to protect the European Union against steel diverted from the United States or impose tariffs on a series of American-made goods.

"The ability for us to focus on freedom and free markets has allowed us to be a powerhouse", Ginn said. This is because he feels that the proposed tariffs will have a negative impact on the economy as well as the belief that the move will have consequences that will undermine any of their recent successes with the new tax overhaul legislation.

Trump has said the US will be "very fair" but "very flexible" and "protect the American worker".

The policy comes as little surprise, since Trump routinely condemned what he characterized as bad trade policies with the likes of China and Japan and vowed to revive American manufacturing by addressing America's trade posture.

The eighth round of negotiations is in the offing and an agreement has yet to be reached on the renewal of the North American Free Trade Agreement. It's likely countries impacted by the tariffs will go to the group to challenge them.

Last week, Trump had generated an endless global controversy by announcing the adoption of heavy tariffs on imports of steel (25%) and aluminum (10%), measures that would especially impact Canada, the largest steel supplier in the USA market.

Honda said Thursday it extensively sources steel and aluminum from US suppliers.