Trump's thinking about a tariff could trigger 'global recession'

Calvin Saunders
July 10, 2017

Trump said in an early morning tweet.

But Trump's move to protect the USA steel industry outside the WTO framework could nonetheless irritate other the world leaders gathered at the larger G20 meeting in Germany this week.

Moreover, trade diplomats fear USA security-based tariffs on steel would widen cracks in the global trading order, after Saudi Arabia, Bahrain and the United Arab Emirates cited national security at the WTO last week to justify their economic boycott of Qatar. Any penalties could have a ripple effect on other trading partners and allies such as Germany, Japan, Russia, South Korea and Mexico, all major steel exporters to the U.S.

"The G20 countries that had hit US interests more often before President Trump was elected are the very G20 countries that have cut back on protectionism the most in 2017", said Simon Evenett, professor of economics at Switzerland's St. Gallen University and one of the authors of the Global Trade Alert.

The EU is the world's second largest steel producer after China.

"We are prepared to take up arms if need be", Juncker said, warning that Europe would respond in days, not months, if Trump calls for restrictions.

More news: Celtics Reportedly Trade Avery Bradley to Pistons
More news: Florida crews to help battle western wildfires
More news: Tour de France stage ends in impossibly close photo finish

While the policy recommendations of those probes haven't been announced, some USA businesses are feeling pretty good about what those protectionist policies might do for them. His point was that it doesn't make sense to talk about bilateral trade deficits in a multilateral world, the official said.

World leaders forged a fragile compromise at a summit in Germany that did not hide the reality that Donald Trump's America is increasingly going its own way. So much for China working with us - but we had to give it a try! Indeed, analysts have warned that tariffs could drive up steel prices for USA manufacturers.

USA allies complain that the result of Trump's national security probes could harm their domestic industries both by imposing direct tariffs and by diverting the overcapacity of global steel and aluminum products into their markets.

According to a report from the International Trade Administration, China is not among the top 10 sources for U.S. imported steel.

German Chancellor Angela Merkel has criticized Trump's view of global trade. The G-20 will "continue to fight protectionism including all unfair trade practices and recognize the rule of legitimate trade defense instruments in this regard". When it comes to trade policy, it's easy to shout "America first", but hard to define exactly what you mean by "America".

The unprecedented move marks the first time any WTO member has ever cited Article 21 of the General Agreement on Tariffs and Trade as a justification for their actions in a WTO meeting.

Other reports by MaliBehiribAe

Discuss This Article