Australia, France and EU join the battle against U.S. steel and aluminum tariffs

Canada may not be U.S. President Donald Trump’s only problem in pursuing tariffs on steel and aluminum heading to the U.S.

Australia, France and the European Union are now increasingly concerned about the effect tariffs could have on their steel and aluminum industries.

Australia’s Prime Minister Malcolm Turnbull spoke out strongly against import barriers Sunday, calling it a “dead end”.

“Protectionism is not a ladder to get you out of the low-growth trap, it is a shovel to dig it a lot deeper,” he told reporters in Sydney.

Oh, oh, look out! Trump’s protectionist policies could set off not just a trade war with Canada, but could spread to parts of the world.

On Sunday, Australia warned against tit-for-tat retaliation and the outbreak of a trade war that could slow global economic growth, as it pushed to be excluded from Trump’s steel and aluminium tariffs. Canberra has sought to be exempt from the hefty tariffs, citing an understanding reached with the United States at G20 meetings last year.

There are also local industry concerns that the tariffs could see cheap steel destined for the U.S. flood the domestic market instead.

“We’ve seen… over the last 48 hours commentary from Canada, from the European Union. We’ve seen the U.S. government going back about tariffs on cars,” Australian Trade Minister Steve Ciobo told Sky News Australia Sunday.

Trump told a meeting of U.S. industry officials at the White House that he will impose tariffs of 25 per cent on steel imports and 10 per cent on imported aluminium next week.

Trump vowed to rebuild American steel and aluminium industries, saying they had been treated unfairly by other countries for decades.

The Australian reports that more than $170 million of Australian steel and aluminium exports to the U.S. could be at stake, largely through Melbourne-based company BlueScope Steel, which is the sole exporter of Australian steel to the U.S.

The move is likely to increase tensions with China, whose top trade official Lui He is in Washington for trade talks.

Canada’s Prime Minister Justin Trudeau has already called Trump’s proposed tariffs “unacceptable”.

The union representing Canada’s 40,000 auto workers says if Canada doesn’t get an exemption from the punitive duties on steel and aluminum it should walk away from NAFTA talks.

“If America imposes duties on steel and aluminum and Canada doesn’t walk away from NAFTA immediately, then make no mistake, we will no longer be negotiating, we’ll be capitulating,” said Unifor National President Jerry Dias in a statement.

In an interview with CBC News, Dias called Trump’s move a “very serious threat” that could lead to mass layoffs and a profound economic impact on various sectors.

“This is really the ultimate slap and the Canadian government needs to view it that way, and the Canadian government needs to retaliate,” he said.

So what happens now?

Australia was already seeing the effects of Trump’s threats on Friday.

“The Australian share market has been pulled down by one per cent falls on Wall Street overnight amid fears of a trade war prompted by US president Donald Trump’s announcement of import tariffs on steel and aluminium,” Agence France-Presse reported.

The benchmark S&P/ASX200 index was down 0.74 per cent at 5,929.3 points at midday AEDT, with all sectors in the red.

The local market is trading under pressure, after a third day of more than one per cent declines on US indices, with stocks declines exacerbated on concern of a possible trade war following the surprise tariff announcement, ABS/CBN News reported. 

So Australia wants an exemption from the tariffs; Canada wants an exemption from the tariffs; pretty soon the whole world will want an exemption from the tariffs. NAFTA is in jeopardy and now other world leaders are weighing in. Even the World Trade Organization has warned serious consequences could result if the U.S. imposes the tariffs.

Roberto Azevedo, the director-general of the Geneva-based WTO, said the agency was “clearly concerned” at the U.S. plans and warned that “a trade war is in no one’s interests.”

“The potential for escalation is real as we have seen from the initial responses,” he said in comments emailed to The Associated Press by a WTO spokesman.

Azevedo said the WTO, the body that oversees global trade, “will be watching the situation very closely.”

The whole world is watching and with the unpredictability of Trump, who knows where this is going.

The European Union is already thought to be considering retaliatory tariffs, roughly one third of which would target steel, one third agriculture, and one third other products.

“We are not going to sit on our hands while our industry is at risk of being hit with unfair measures,” said European Commission spokesman Alexander Winterstein.

His boss, European Commission chief Jean-Claude Juncker, suggested the 28-nation trade could also target typically American products such as Harley Davidson motorcycles, Bourbon whiskey and blue jeans.

“I don’t like using the word trade war, but I can’t see how this isn’t part of war-like behaviour,” Juncker told German media ahead of a planned speech late Friday in Hamburg.

French Finance Minister Bruno Le Maire confirmed he was planning to talk with counterparts in Germany and Britain about how to respond if the U.S. imposes tariffs.

“The United States must know that if these unilateral decisions were to be maintained and confirmed, they would lead to a strong, co-ordinated and united answer from the European Union,” Le Maire said in Paris.

Trump didn’t appear too concerned about the prospect of a trade war, even with a key partner such as the EU.

In a tweet early Friday, he said “when a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.”

Watch out Mr. Trump. This one may just be a bigger battle than you expected with Canada, Australia, France and the rest of the EU all looking at how to retaliate.

A worldwide trade war may not be in anybody’s interest, but it appears that might just be where this dispute, initiated by Trump, might be headed.

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Jeff Wilkinson

About the Author: Jeff Wilkinson

Jeff Wilkinson  is a Senior Politics Reporter at Debate Report covering provincial and national politics, . Before joining  Debate Report, Jeff worked on several provincial campaigns including Jack Layton. Jeff has worked as a freelance journalist in Toronto, having been published by over 20 outlets including CBC, the Center for Media and VICE.com.

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