SEOUL/SYDNEY: US President Donald Trump’s planned tariffs on steel and aluminium will distort global trade and cost jobs, Australia’s trade minister said on Friday, highlighting the risk of retaliatory measures as Asian exporters sought more detail on the plans.
Fears of an escalating trade war hit the share prices of Asian steelmakers and manufacturers supplying US markets particularly hard on Friday following a rough night on Wall Street.
Trump said the duties of 25 per cent on steel and 10 per cent on aluminium would be formally announced next week, although White House officials later said some details still needed to be ironed out.
“The imposition of a tariff like this will do nothing other than distort trade and ultimately, we believe, will lead to a loss of jobs,” Australian trade minister Steven Ciobo told reporters in Sydney.
Steel has become key focus for Trump, who pledged to restore the US industry and punish what he sees as unfair trade practices, particularly by China.
Although China only accounts for 2 per cent of US steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.
“The impact on China is not big,” said Li Xinchuang, vice secretary-general of the China Iron and Steel Association. “Nothing can be done about Trump. We are already numb to him.”
South Korea, the third-largest steel exporter to the United States after Canada and Brazil, said it will keep talking to US officials until Washington’s plans for tariffs are finalised.
“For us, the worst case scenario was a 54 per cent tariff,” said a South Korean trade ministry official who declined to be named as he was not authorised to speak to media. “Still if the option for a global tariff of at least 24 per cent is taken, that will still affect our steel exports to the US”
Asian steelmakers fear US tariffs could result in their domestic markets becoming flooded with steel products that have nowhere else to go.
“We are concerned about how other exporters react, what will happen with steel that cannot be sold to the US,” Vikrom Wacharakrup, Chairman of Iron and Steel Industry Group, Federation of Thai Industries, said. Thailand exports steel mainly to Asia but also the United States.
The Trump administration also cited national security interests for its action, saying the United States needs domestic supplies for its tanks and warships.
India also raised concerns about the use of the national security interests provisions.
“We have only 2 per cent of our exports to US so no immediate dent, but validity of Section 232 is stretched to be used as tariff barrier,” India’s Steel Secretary Aruna Sharma said.
Japan’s Toyota Motor Corp said the tariffs would substantially raise costs and therefore prices of cars and trucks sold in America. News of the tariffs hit sentiment on Wall Street due to the potential impact of higher costs on consumers and the potential for damaging tit-for-tat retaliation by affected countries.
— Reuters
Oman Observer is now on the WhatsApp channel. Click here
