Trade Wars Are Good, Easy to Win

US President Donald Trump announces tariffs on steel and aluminum imports at a White House meeting with US industry leaders

World Trade Organization Director General Roberto Azevedo expressed concern at U.S. President Donald Trump's plan for tariffs on steel and aluminum on Friday, an extremely rare intervention into a WTO member's trade policy.

Trump's decision - which leans on a rarely-used trade provision allowing protections for national security - could hit other countries far more than China, which is the world's largest steel producer but accounts for less than one percent of United States imports.

President Donald Trump announced Thursday he intends to impose duties of 25 per cent on steel and 10 per cent on aluminum, with no mention of excluding Canada, which is the main supplier of both metals to the U.S.

While US officials said some details of the tariffs still needed to be ironed out, White House spokeswoman Sarah Sanders said on Friday the levels of 25 per cent for steel and 10 per cent for aluminium were not expected to change. Liu He is due to stay in Washington until Saturday.

A spokesman for the PM said the Government is talking to United States counterparts to find out how the new trade war will affect the UK. Since April 2017, the Trump Administration has been contemplating a hike in tariffs for a broad range of steel and aluminum mill products, based upon a rarely used provision of US law.

Canadian Prime Minister Justin Trudeau said he has spoken directly to Trump to indicate his displeasure with the tariffs, Canadian media reported.

In January, Ford warned that higher prices for metals such as aluminum and steel would be a significant drag on its earnings this year.

"Risks of trade wars are rising, but should be contained for now", said Cesar Rojas and Ebrahim Rahbari of Citigroup in a report.

Local steel industry officials are applauding President Trump's push for tariffs on steel and aluminum. "More importantly, because of that, workers in our country have not been properly represented", the president told the gathering, which was attended by top industry executives.

"We also don't see a chance for fine tuning, exceptions, carve outs, or a country-by-country policy" in the short term, the group said in a research note.

"It just makes no sense to highlight that Canadian steel or aluminium could be a security threat to the United States", he said. This kind of tit-for-tat strategy loses the bigger picture of US trade relationships.

"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", Trump said on Twitter on Friday. The American International Automobile Dealers Association said the tariffs could cause the cost of a vehicle to rise a lot. In 2003, he estimated losses in steel-consuming industries at a maximum of 43,000 jobs.

Industries that consume aluminum and steel products add far more to U.S. economic output than companies which produce these metals.

US Commerce Secretary Wilbur Ross played down the fears, saying "hysteria over tariffs is a lot to do over nothing". Trump used an obscure provision of existing trade laws to enact the tariffs, which are expected to be challenged in global courts in the coming months.

"Such a broad and sweeping order could have a negative impact on the entire US economy, potentially costing and ultimately, hurting American consumers through higher prices for everyday products", the Hershey spokesman adds.