Published: Sat, June 02, 2018
Money | By Wilma Wheeler

United States allies hit back over steel and aluminium tariffs

United States allies hit back over steel and aluminium tariffs

A spokeswoman for the U.S. Chamber of Commerce told The Canadian Press that the decision will hurt American workers and families and will "will hike prices, upend supply chains, and cost American jobs". "This is exactly what happened in the 1930s (prior to World War II)". "But it will be known", said one source, who spoke on condition of anonymity because of the sensitivity of the situation.

"It is unfortunate that trade tensions are rising at a moment where the global recovery is being supported by trade", the IMF's Mr Rice said in his statement.

Canada's Prime Minister Justin Trudeau takes part in a news conference in Ottawa, Ontario, Canada, May 31, 2018.

"This is $16.6 billion of retaliation", said Canada's Foreign Affairs Minister Chrystia Freeland on Thursday. "Today's action targets America's allies when we should be working with them to address the unfair trading practices of countries like China." he said.

European Commission President Jean-Claude Juncker said Trump's tariffs were "totally unacceptable" and promised to retaliate in due course.

"The Europeans and Mexico have targeted industries that have politically prominent locations", said Brad Setser, senior fellow for worldwide economics at the Council on Foreign Relations. "But we need to respond".

The key, sources say, will be to find a way to give Trump the political cover he needs to claim a face-saving political victory. They were none other than Canada, Mexico, and the European Union, countries which had previously been exempted.

Another source said there are "many ways to declare victory" and Canada wants to help Trump "succeed".

At a meeting of the Group of Seven top world economic powers in Canada, France's Finance Minister Bruno Le Maire castigated the United States for its tariffs, saying Washington was isolated.

Business leaders in Canada and the US predicted dire economic consequences as result of the decision, which was derided on both sides of the Atlantic.

Closer to home, Trump is also facing criticism from Republicans, including their leader in the House of Representatives, Paul Ryan.

Trump continued to face criticism Friday.

French President Emmanuel Macron called the move illegal.

Brussels has lodged an eight-page list at the World Trade Organization of goods it would hit with retaliatory measures.

Trump, unmoved by all of it, dug in his heels.

The European Union was "a peace project, including on trade", Mogherini said.

Shadow Trade Secretary, Barry Gardiner, tells BI that Prime Minister May must "fight for British industries and British jobs". "Most of the time as I travel around I get confirmation these are high quality high value steel imports", he said, adding that in many cases these were products that couldn't be obtained in the U.S.

Shares of US Steel Corp rose 1.7 per cent, but AK Steel fell 1.3 per cent and Steel Dynamics Inc shed 0.9 per cent. Shares of Century Aluminum Co jumped 3.3 per cent but Alcoa Corp shed 0.9 per cent.

The sources interviewed Friday emphasized that anything could "turn on a dime" with Trump; hours later, they were proven correct.

Trump's demands put the leaders of trade partners such as Canada, Mexico and China in a precarious position, because they're not willing to harm their own economies just so Trump can fulfill campaign promise.

However, Ross said NAFTA talks are "taking longer than we had hoped" and said "there is no longer a precise date when they may be concluded".

The yield on 10-year Treasuries dropped to 2.83 percent, while the USA dollar turned higher and the euro erased gains.

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