US President Donald J. Trump’s surprise decision to impose tariffs on imported steel and aluminum, and a tweeted declaration that “trade wars are good” have set off alarm bells across the globe while causing the stock market to plunge.
The tweet read around the world:
Trump on tariffs: In unscripted remarks that reportedly caught his team off guard, Trump said on March 1 that he would unveil import tariffs next week: 25 percent on steel and 10 percent on aluminum.
“What’s been allowed to go on for decades is disgraceful. It’s disgraceful,” the president told reporters.
The remarks delivered a shock to the global economy sending the Dow plummeting more than four hundred points on March 1, and triggering sell-offs in Asia and Europe.
This is how the world is reacting:
European Commission President Jean-Claude Juncker issued a strong statement condemning Trump’s decision. “We strongly regret this step, which appears to represent a blatant intervention to protect US domestic industry and not to be based on any national security justification. Protectionism cannot be the answer to our common problem in the steel sector. Instead of providing a solution, this move can only aggravate matters,” he said.
“The EU has been a close security ally of the US for decades. We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk… The EU will react firmly and commensurately to defend our interests. The Commission will bring forward in the next few days a proposal for [World Trade Organization] WTO-compatible countermeasures against the US to rebalance the situation,” he added.
European Commissioner for Trade Cecilia Malmström said the US measures “will have a negative impact on transatlantic relations and on global markets. In addition, they will raise costs and reduce choice for US consumers of steel and aluminium, including industries that import these commodities. The EU will seek dispute settlement consultations with the US in Geneva at the earliest opportunity.”
“This go-it-alone action by the US will not help,” she added.
Canadian Foreign Affairs Minister Chrystia Freeland said any tariffs on Canadian steel and aluminum would be “absolutely unacceptable.”
“As a key [North American Aerospace Defense Command] NORAD and NATO ally, and as the number one customer of American steel, Canada would view any trade restrictions on Canadian steel and aluminum as absolutely unacceptable,” she said.
“Any restrictions would harm workers, the industry, and manufacturers on both sides of the border. The steel and aluminum industry is highly integrated and supports critical North American manufacturing supply chains. The Canadian government will continue to make this point directly with the American administration at all levels,” she added.
Canadian Trade Minister Francois-Philippe Champagne had this to say: “What we need to remind ourselves is that the United States has in fact a trade surplus with Canada when it comes of steel to about 2 billion and that Canada buys more US steel than any country in the world. And any suggestion that Canadian steel would pose a threat to national security is completely obviously misplaced.”
German Foreign Minister Sigmar Gabriel told the German daily Die Welt: “We must do everything we can to avoid an international trade conflict.”
Bernd Lange, a German Social Democrat and head of the European Parliament’s trade committee, was more forthright. “With this, the declaration of war has arrived,” he told German public radio.
“Unacceptable,” French Finance Minister Bruno Le Maire said of the tariffs. “The United States needs to know that if it goes ahead with these measures, they will meet with a strong, coordinated, and united response from the European Union,” he said.
“These unilateral measures are not acceptable. They would have a major impact on the European economy and French companies like Vallourec and Arcelor,” he added. Arcelor Mittal is the largest steel producer in Europe and the United States.
Chinese foreign ministry spokeswoman Hua Chunying urged the United States to show restraint.
“If countries around the world all follow the step of the US, it will definitely inflict serious impacts to the international trade order,” she said.
“We urge the US to be restrained in taking trade protection measures, follow the multilateral trade rule, and positively contribute to the global economic and trade order,” she added.
Ashish Kumar Sen is deputy director of communications at the Atlantic Council. Follow him on Twitter @AshishSen.