Trump Tariffs Needle Allies More Than China
Trump Tariffs Needle Allies More than China
Donald Trump’s latest trade move, like those before, is hurting his allies more than his rivals.
U.S. partners across the world are crying foul after the president pledged to impose 25 percent tariffs on steel imports and 10 percent on aluminum in the name of protecting national security. Australia’s trade minister called it “disappointing.” Japan reminded the U.S. it wasn’t a threat. Norway said national security is no excuse for protectionism. Canada vowed to strike back.
China — whose U.S. trade surplus dwarfs all others — was muted. That’s because the country sells relatively little steel to the U.S. and Bloomberg Economics estimates the impact might be negligible.
The situation was similar last year when Trump withdrew from the Trans-Pacific Partnership trade deal, which includes Canada and Japan, but not China.
To hurt China, Trump would need to go after a broader bucket of merchandise, such as electronics, textiles and toys. Go there, and a tit-for-tat could become a full-blown trade war.
Trump indicated a willingness to escalate with an early-morning tweet declaring that “trade wars are good and easy to win.” But he’s not on totally solid footing at home. The tariffs further strain ties with a Republican establishment already wary after Trump’s softening tone on gun control and an intense debate raged inside the White House before the trade move was announced.
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--With assistance from Kathleen Hunter
To contact the editor responsible for this story: Anthony Halpin at thalpin5@bloomberg.net.
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