Furious World Responds To Trump Tariffs, Vows Retaliation

Trump may think that trade wars are "good and easy to win" but the rest of the world, which just happens to have a record trade surplus with the US (excluding petroleum)... 

... disagrees, and judging by the barrage of reactions overnight from manufacturers and trade partners from China to Europe, is rather furious ahead of Trump's import tariff order, expected to be signed next week.

Start with China, the world’s largest steel producer however only the 11th largest US source of imported steel...

... where the official response was generally muted.

Foreign Ministry spokeswoman Hua Chunying merely said in Beijing Friday that China urges the U.S. to follow trade rules. China's Ministry of Commerce added that US restrictions on steel trade hurt the global trade system, and that Chinese steel exports to the US do not "harm US security."

Chinese industry insiders, however, were far less restrained. The U.S. measures "overturn the international trade order," Wen Xianjun, vice chairman of the China Nonferrous Metals Industry Association, said in a statement. “Other countries, including China, will take relevant retaliatory measures.”

Also in China, the vice chairman of China Iron and Steel Association, Li Xinchuang, called the move "a stupid trade protection measure."

Ultimately, the big question is whether, and how, China would retaliate: MOFCOM made it clear that it is considering just that when it cautioned that China "may take measures to protect its own interests."

Nations closer to the US, including strategic American allies, responded with bafflement and dismay seeing their industries threatened. Some also panned the idea that metals imports pose a threat to national security.

“Steel and aluminum imports from Japan, which is an ally, do not affect U.S. national security at all,” Japan’s Trade Minister Hiroshige Seko told reporters in Tokyo Friday. “I would like to convey that to the U.S. when I have an opportunity.”

Canada, which is the biggest foreign supplier of steel to the U.S. was furious: Ottawa said the US measures were unacceptable.

Australian Trade Minister Steve Ciobo called the move “disappointing” and said his country is seeking an exemption.


The Netherlands was especially vocal, and said it was "very disappointed" that the U.S. has announced trade measures against steel and aluminum against it and said it finds the reasoning behind the announced U.S. measures “invalid.” The Netherlands also said it “fully” supports the European Commission in defending the economic interests of the European Union and the member states

The French finance Minister Bruno Le Maire echoed the sentiment, warning Europe will retaliate with a firm joint response if the Trump administration goes ahead with its tariff plans. Le Maire told journalists that "all options are on the table" and Washington could expect a“strong, unilateral and coordinated” response from the European Union.

“These unilateral measures are not acceptable. They would have a major impact on the European economy and French companies like Vallourec and Arcelor,” Le Maire said, referring to Luxembourg-based European steel producer ArcelorMittal.

And speaking of the European Union, it also vowed to “react firmly” with World Trade Organization-compliant countermeasures in the next few days. EU Commission spokesman Winterstein said that the EU already has counter-measures ready against US tariffs and stands ready to respond.  Reports in late February in the German press suggested that the European Union is drawing up a list of U.S. products to target — including orange juice and Kentucky bourbon — if Trump proceeds with aluminum and steel import tariffs. For the full European response we must wait until March 5, when EU officials said they would formalize their response to the tariffs.

The angry response was not confined to foreign trade partners: U.S. companies from beer brewer MillerCoors to candymaker Hershey Co., which use aluminum for manufacturing and packaging, also warned that operations would be hurt by the tariffs.

“We buy as much domestic can sheet aluminum as is available, however, there simply isn’t enough supply to satisfy the demands of American beverage makers like us,” MillerCoors said in a tweet. “American workers and American consumers will suffer as a result of this misguided tariff.”

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Meanwhile, as reported previously, according to Barclays calculations, the direct economic effects of anti-trade policies to the US would be limited, given their small share in total goods imports. On the issue of what, if any, inflationary impulse will be generated from higher tariffs, it depends on whether firms view the increase as permanent and if the current state of the business cycle would contribute to a high pass-through rate from tariffs to final goods. That said, Barclays estimates tariffs at these levels to boost y/y rates of core CPI and PCE by an almost negligible 0.1pp.  Separately, in regard to activity, the tariffs could reduce trade volumes and higher prices could restrain consumer and business spending. Together Barclays estimates they could reduce GDP growth by 0.1-0.2pp.

Others agreed: "China’s total exports of steel and aluminum are equal to about 0.5% of GDP, most of that from steel,” said Bloomberg’s Chief Asia Economist Tom Orlik. “Relative to fears from Trump’s campaign trail rhetoric, in which he threatened an across-the-board 45% tariff on all imports from China, these measures are extremely limited.”

And while the direct threat to the US economy from Trump's tariffs is negligible, the risk of course, lies in the response of US trading partners and whether the administration’s decision to impose restrictive trade policies is only the first in a series of moves.

As Bloomberg notes, "A U.S. move on tariffs risks provoking retaliation, particularly from Beijing. China has already launched a probe into U.S. imports of sorghum, and is studying whether to restrict shipments of U.S. soybeans -- targets that could hurt Trump’s support in some farming states. While China accounts for just a fraction of U.S. imports of the metals, it’s accused of flooding the global market and dragging down prices."

To be sure, as noted earlier, in light of the record US trade deficit (ex petroleum), it is likely that the White House will seek to enact further steps to restrict trade should a retaliatory tit-for-tat impulse emerge.

Still, some remain hopeful. According to Alex Wolf, economist at Aberdeen Standard Investments who previously worked at the U.S. State Department, the impact of the step hinges in part on which nations will be affected.

"It’s not much ado about nothing, but until we see the final scope of the tariffs and the response from global trading partners it’s hard to say it’s the start of a tit-for-tat trade war."

Then again, with tweets like this...

... a "tit-for-tat" trade war is all but assured.


Pandelis wildbad Fri, 03/02/2018 - 07:59 Permalink

Bring it on you fucking cannucks.  That PM you got there Trudeau is a child abuser ... took his 2 years old son to a gay parade and dressed him as a girl ... imagine the abuse the child has to endure from this sucker.  The kid should be taken from this dangerous man.  Someone who does that to his kid imagine what he will do to the rest of us.


MAGA America First.  Enough is enough!  Go Mr. Trump!  you know how to do it. create a level playing field.  if they are not ready who cares about the rest of the world.

In reply to by wildbad

MoreFreedom the artist Fri, 03/02/2018 - 12:04 Permalink

When governments subsidize certain sectors of their economy (typically because their politicians are heavily invested in the firms involved) via taxing their citizens to make their exports cheap, that means their taxpayers are subsidizing consumers in other countries, like the USA.   That goes beyond "Time to pay your own way" into giving us a below cost price at their expense. 

We should take advantage of it until they get tired of subsidizing us.


In reply to by the artist

the artist MoreFreedom Fri, 03/02/2018 - 17:12 Permalink

Aside from the notion that we are subsidizing third world systems of slavery and Communism...

Who gives a shit about plastic trinkets when GDP is at stake.  The cost of the subsidy of other nations like China is our manufacturing sector and later on even our innovation and fashion is dead as a dodo.

That is the reason for tariffs in the first place...so countries that use slave labor to produce goods won't out compete other countries who do not. To prevent economic warfare from bankrupting entire sectors of our economy. 


In reply to by MoreFreedom

Rex Andrus Brazen Heist Fri, 03/02/2018 - 08:19 Permalink

There are some things you don't know, that you don't know you don't now, that MSMs and bankster thugs make lucrative careers keeping you and yours from knowing, that if you knew would entirely change your perspective on Everything. Ask better questions. Begin by chucking the stupid fucking labels. Your automatic impulse for abstraction is key to their methods. Unbox that shit.

In reply to by Brazen Heist

MoreFreedom overmedicatedu… Fri, 03/02/2018 - 12:09 Permalink

You are correct; other governments have import duties that make US products more expensive for their citizens.  That doesn't mean we should add import duties to US imports so that US manufacturers have to pay more for inputs to their products (which means their end products will cost more leading to lower sales here and abroad), or that US consumers need to pay more for stuff they consume.

I wish Trump success in reducing foreign taxes on imports from the US, but not at the counterproductive expense of people in the US. 

In reply to by overmedicatedu…

de3de8 Troy Ounce Fri, 03/02/2018 - 08:19 Permalink

Considering the steel and aluminum industries have been destroyed domestically for some time (save the speciality vendors) it will take years and years to rebuild if in fact intent is domestic demand satisfied by domestic production. In that interim will have no choice but to use imported product at higher (import tax) cost. No wonder our domestic users hair on fire.

In reply to by Troy Ounce

east of eden de3de8 Fri, 03/02/2018 - 08:32 Permalink

OK. Let's look at aluminum. Aluminum takes huge amounts of electricity, to produce, but, I haven't seen any dramatic rise in 'unallocated electricity' production in the US. Where do you think you are going to get the electricity you would need to increase aluminum production? This stupid move is a classic 'putting the cart before the horse' strategy, if you can call it a 'strategy' at all.

The whole thing is absurd, and Bloomberg is incorrectly reporting that Canada is the #1 aluminum exporter, to the US, which is simply not the case. Then, in steel, the US has a $2 Billion US (2.6B CAD) annual SURPLUS with Canada. So, go ahead. You block our steel and we will block yours, and deposit an additional 2 billion a year into our national accounts. Thanks again. Keep up the good work!

In reply to by de3de8

johnlocke445 east of eden Fri, 03/02/2018 - 10:57 Permalink

President Trump is not only doing good work, but he is doing fantastic work! You are speculating about that shortage of electricity. If there is a demand for more electricity in this country the private market will gladly supply it to make more profits. Remember, we now have an expanding coal industry ready to go because of President Trump. I don't care if other countries block our steel exports. They hardly buy any as it is. We can do just fine if we produce the steel here and sell it here. What happened when we were the premier producer of steel in the beginning of the 20th century? We were the supplier and the consumer at the same time. Very few countries around the world were advanced enough to want steel from America. Every country around the world would do just fine by producing products and selling those products to its own consumers. By the way, I still have my great grandmother's can opener, made in Kenosha, Wisconsin, in 1896. How many can openers from China can go that long?

In reply to by east of eden

Ghordius overmedicatedu… Fri, 03/02/2018 - 10:22 Permalink

hi overmed. from my point of view, the first time I heard about that "NWO shit" it was from the lips of Bush Jr. (then president)

what I understood was "New World" (that would be the Americas, so America) and "Order", so I understood "US Hegemony" (well, it was the 90's/noughties)

it took me years to understand that you Cousins in the US were talking about completely different things. and that Bush was reframing a so-called "conspiracy theory" vocabulary item

the rest of the world was using the term "globalisation", btw. and critics of it were against Free Trade, i.e. protectionists. usually on the Left, note

the original theory about "globalism" was, I later found out, that the world was "evolving" (or "progressing") towards a "One Planet Government"

so my question: is it still going this way? (see China and Russia)

In reply to by overmedicatedu…