ibusinesslines.com March 18, 2018

Catherine Rampell: Trump has been playing right into China's hands

15 March 2018, 03:40 | Erica Roy

Anti-globalist President Donald Trump imposed new steel and aluminum tariffs. But he exempted Canada and Mexico despite being anti-NAFTA

Anti-globalist President Donald Trump imposed new steel and aluminum tariffs. But he exempted Canada and Mexico despite being anti-NAFTA

By offering countries a way to escape the tariffs, Trump might have eased the risk of a destructive trade war.

"There are no winners in a trade war, and it would bring disaster to our two countries as well as the rest of the world", Commerce Minister Zhong said. One recommendation that was floated is restricting imports of steel and aluminum to 63 per cent of 2017 levels.

USA steel and aluminum producers - and their counterparts around the world - have been hammered by overproduction by China.

Brazilian authorities intend to use the next two weeks to convince the US not to impose the new barriers on imported steel.

A second person, who is an industry lobbyist in Washington who is familiar with the administration's thinking said the process was being led by Peter Navarro, an avowed protectionist, who has accused American companies of conniving with the Chinese state, and by U.S. Trade Representative Robert Lighthizer, who also favors tariffs as a tool. But worldwide trade has been anything but free.

Mr. Trump's tariffs finally are an indication that the United States no longer will capitulate to China's trade cheating.

Australia's Prime Minister Malcolm Turnbull said on Saturday, March 10 that he and Trump confirmed that tariffs would not apply to the country.

South Korea's "transshipment" of Chinese steel products to the United States is reportedly cited as a barrier in winning an exemption.

Prior to announcing the exemption, Trump said he would lift the tariffs off of Canada and Mexico only if a new NAFTA deal were signed. Both will be losers and the world trade will suffer as a outcome.

"The exemption represented a positive step in the right direction but we still have a lot more work to do", Trudeau told the room full of aluminum workers. "We will stand up to the bullies", Trade Commissioner Cecilia Malmstrom said earlier in the day. The administration has said these moves are a matter of national security, a nebulous argument that other countries could invoke as well if they chose to retaliate.

Meanwhile, Canadian Foreign Minister Chrystia Freeland is due to visit Washington this week from Tuesday to meet with Ross, Lighthizer and US lawmakers to senators to "advance Canada's efforts to keep trade open, fair and barrier-free, to benefit people on both sides of the border", the ministry said in a statement. The deficit could be reduced by 35 percent if the USA eased export controls on high-technology products to China, he said, citing unspecified USA research. The bloc does impose a 10 percent levy on US auto imports, while the USA charges a 25 percent levy on trucks and pickups, and up to 40 percent on some clothes, she said.

Brussels has pushed back hard against Washington's shock measures, loudly announcing a list of U.S. products it could hit with countermeasures.

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