WTO chief warns US tariffs could bring potential ‘domino effect’
The United States is talking with the European Union on the new steel and aluminum tariffs while indicating there is so far no change on the China front.
US President Donald Trump signed orders on Thursday to impose 25 percent tariff on steel imports and 10 percent on aluminum imports from March 23, but he made exemptions for Mexico and Canada, two of countries that are renegotiating North American Free Trade Agreement and possible exceptions for other US military allies.
Trump first announced the tariffs on March 1 after a Commerce Department investigation under Section 232 of the US Trade Expansion Act of 1962 found the imports threatened to damage US national security.
White House Press Secretary Sarah Sanders, asked on Monday if Trump will follow his tariff measures on China, said the administration’s position hadn’t changed.
“The president has been clear for quite some time what his position is and what his authority is under the 232 statute, and we are moving forward,” she said. “We are going to continue to push for what’s best for America.”
Trump said on Thursday that the US is negotiating with China. “We’re in the midst of a big negotiation. I don’t know if anything will come of it. They have been very helpful,” Trump said.
He tweeted on March 7 that China has been asked to develop a plan for the year of a $1 billion reduction in their trade deficit with the US.
“Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” he wrote in the tweet.
Trade war?
All these have been seen as a possible message for the two countries to reach a solution and avoid a trade war that many are worried.
China’s Minister of Commerce Zhong Shan said on Sunday that China has no intention of starting a trade war with the US, but added that the country can cope with any challenge and will defend its national interests.
“Trade wars can result in no winners, only disasters for the two countries and the rest of the world,” he said.
China is not among the top 10 steel importers to the US.
US lawmakers and trade partners have continued to push back on Trump on the tariffs.
Trump tweeted on Monday morning that Commerce Secretary Wilbur Ross will talk with the EU about eliminating its levies, while a European Commission spokesman said earlier on Monday that it expects talks this week “at several levels”.
The EU had earlier announced a provisional list of items that it may levy in retaliation, such as Harley-Davidson motorcycles and jeans.
US voters are split on Trump’s plan. About 40 percent of the some 2,000 registered voters surveyed said they support the decision while 35 percent oppose it, according to a poll on Thursday by POLITICO/Morning Consult.
World Trade Organization Director-General Roberto Azevedo on Monday warned of the potential “domino effect” of the tariff proposal.
“This escalation, which I say has a domino effect, will be tough to reverse,” Azevedo said.
“Once you enter the path of reciprocal reprisals, you know when it begins, you know how it begins, but you don’t know how or when you will be able to stop the process.”
