History Suggests Trump Tariffs Will Not Spark a Trade War

Stocks Tumble As US President Donald Trump Sparks Global Trade War Fears

Canada will retaliate against any US tariffs on steel and aluminium products, officials said on Thursday, as Ottawa faced what could be one of the biggest economic threats since Donald Trump became president.

Trump said the duties of 25 percent on steel and 10 percent on aluminum will be formally announced next week as the government seeks to protect American manufacturers, Reuters reports.

Trump believes the tariffs will safeguard American jobs but many economists say the impact of price increases for consumers of steel and aluminum, such as the auto and oil industries, will be to destroy more jobs than they create.

The report called for a 24 percent tariff on steel exported from all countries and higher tariffs on exports from 12 targeted countries: Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam.

By the time foreign trade partners hit back with reprisals, the tariffs may boomerang on Harley-Davidson (HOG), Jack Daniels and soybean farmers, and the list may get a lot longer. Agriculture is the number one target.

"I work with the president when I think he's right and I work against him when I think he's wrong", Brown said. They employ more workers than steel and aluminium mills, and Anheuser-Busch InBev NV has already urged Trump to reconsider.

Critics have warned that he would be tempting a trade war, but Mr. Trump insists that he is reversing decades of unilateral surrender to foreign competitors.

Canada is the biggest exporter of steel to the US and most of that steel comes from our area. The European Union has said it will take action if "unjustifiably hit" by the tariffs. Any sweeping new tariffs are expected to be contested at the World Trade Organization.

In another blow to a West Wing under siege, CNN reported Thursday that Federal Bureau of Investigation counterintelligence was probing a deal sealed by the President's daughter Ivanka in Canada to see whether it left her vulnerable to foreign agents.

In other words, it's hard to imagine a clumsier, more ham-handed way of seeking to redress unfair trade practices than a 25% tariff on global steel imports.

Another reason is likely that trade with the US was too valuable to exporting nations around the world. By contrast shares of steel consumers fell with Ford Motor Co down over 3 percent and General Motors Co down nearly 4 percent.

Eddy Hayes, an worldwide trade lawyer and chair emeritus of the board of the World Trade Center in New Orleans, said Trump's move puts the "unchartered territory".

Despite reported divisions in the White House over the wisdom of major tariffs, Trump appeared determined to stick to his guns. Trump on Thursday announced plans to slap tariffs. "Flat products accounted for the largest share of steel exports to the United States in both Canada [58% or 3.1m metric tons] and Mexico [39% or 1.2m metric tons], respectively".

A move to impose tariffs "caters to the steel belt in Pennsylvania and OH to 'bring steel back.' It takes two years to build a steel mill".

Trump met with more than a dozen executives, including representatives from U.S. Steel Corp., Arcelor Mittal, Nucor, JW Aluminum and Century Aluminum.

"The largest importer of aluminum to the United States is Canada-one of America's strongest allies".

The tariffs have also divided industries, workers and policymakers. "We want a level playing field", said Dave Burritt, president and chief executive officer at U.S. Steel.

"We are pleased that the president has made a decision to use all the tools at his disposal to send a clear message to foreign competitors that dumping steel products into our market will no longer be tolerated", Ferriola said in a statement. "Steel is a basic industrial commodity".