Global trade war: US allies prepare to strike back

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Brussels, June 1 (IANS) The tariffs imposed on steel and aluminium by US President Donald Trump’s administration prompted swift pledges of retaliation by its biggest allies and trade partners raising the prospect of a global trade war.

Canada, Mexico and the EU were all planning to hit back against US-made metals, farm products and other goods. US Secretary of Commerce Wilbur Ross on Thursday said that the US decided to no longer exempt the three regions from a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium imports.

The new US tariffs on steel and aluminium were set to go into effect on Friday.

The US is playing a “dangerous game” by slapping tariffs on European steel and aluminium, EU’s Trade Commissioner Cecilia Malmstrom said on Friday, warning that Washington’s move would have consequences for the economic recovery of the EU, as well as American consumers, the BBC reported.

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The EU issued a 10-page list of tariffs on US goods ranging from Harley-Davidson motorcycles to bourbon. Malmstrom said the EU would challenge the move at the World Trade Organisation but that tariffs on US imports were necessary as “we cannot just take these tariffs and stay silent”.

The commissioner said that despite the EU’s “rebalancing” action, the two sides were not in a trade war.

“What we are in is a very difficult situation,” Malmstrom said. This situation could only be defused by the US withdrawing its measures against the EU, she added.

Canadian Prime Minister Justin Trudeau said the US move was “totally unacceptable” and rejected the claim that his country posed a national security threat to America.

Canada plans to impose tariffs of up to 25 per cent on about $13 billion worth of US exports from July 1. Goods affected will include some American steel, as well as consumer products such as yoghurt, whiskey and coffee.

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The Mexican government said that the US action was “not justified” and that it would retaliate with its own comparable penalties on US products including lamps, pork, fruit, cheese and flat steel.

Trump claimed the tariffs would protect US steelmakers, which were vital to national security. French President Emmanuel Macron called him to tell that the tariffs were “illegal”.

UK International Trade Secretary Liam Fox said the 25 per cent levy on steel was “patently absurd”, adding: “It would be a great pity if we ended up in a tit-for-tat trade dispute with our closest allies”.

China said that it was willing to work with any country to promote multilateralism and economic growth, after the US measure which Beijing called “indiscriminate”.

Chinese Foreign Ministry spokesperson Hua Chunying urged all countries to oppose the US measures and uphold an “open and transparent” international trade system with the World Trade Organisation at its centre.

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