President Donald Trump invited a trade war after slapping tariffs on steel and aluminum imports, daring other countries to act on threats of retaliation.
This story by Bloomberg appeared in Automotive News.
Trump is facing anger from manufacturers and trade partners in China and Europe after announcing tariffs of 25 percent on imported steel and 10 percent on aluminum for “a long period of time.” The formal order is expected to be signed this week.
Trump in a follow-up tweet Monday morning warned of more trade actions ahead, casting them as reciprocal taxes, a term he has used for imposing levies on imports from countries that charge higher duties on U.S. goods than the U.S. currently charges.
“We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!” Trump said in the tweet.
The aggressive stance has stoked fears of trade retaliation and roiled global markets. The U.S. dollar weakened for a second day against a basket of currencies, while equity markets across the U.S., Asia and Europe have declined.
Trump hasn’t given the details of his proposed action on steel and aluminum tariffs, including whether any products or countries would be exempted.
The planned tariffs, justified on the basis that cut-price metals imports hurt both American producers and national security, now raise the prospect of retaliatory curbs on American exports and higher prices for domestic users. While the practical impact may yet turn out to be limited, the political environment for global trade has just taken a turn for the worse.