Threat of counter measures
Trump steel tariffs prompt global outrage
The threat of a trade war with China and higher goods prices led to a sharp sell-off in Wall Street on Thursday,
Shares in Asia plummeted overnight with Japan’s benchmark Nikkei 225 losing more than 2% by mid-morning.
The Dow Jones Industrial Average initially fell more than 570 points, with heavy losses for manufacturers such as Caterpillar and Boeing. The index closed down 420 points and the S&P 500 and Nasdaq both dropped on the day.
Canada and the EU responded by saying they would introduce their own measures to the steep new tariffs.
Canada is the largest exporter of steel to the United States, and Trump’s proposed tariff would raise the cost of building vehicles, experts say.
Mexico, China and Brazil have also said they are considering retaliatory action.
Under the NAFTA agreement, 62.5% of the net cost of a passenger car or light truck must originate in the NAFTA region to avoid tariffs. Mr Trump wants the threshold raised to 85% and is also seeking to ensure that half the total content is U.S.-made.
Mr Trump tweeted that the US had been “decimated by unfair trade and bad policy”. He said steel imports would face a 25% tariff and aluminium 10%.
However, critics argue that the tariffs would fail to protect American jobs and would ultimately put up prices for consumers.
Metals executives, including representatives from US Steel Corp and Arcelor Mittal, offered support to Mr Trump.
During his presidential campaign, he accused foreign countries of “dumping vast amounts of steel all over the United States, which essentially is killing our steelworkers and steel companies”.
Since taking office he has said cheap imports from China are harming the viability of industry in the US.