Trump signs sweeping tariffs, triggers global trade war

Trump signs sweeping tariffs, triggers global trade war

Despite warnings of a possible global trade war and protests at home and abroad, US President Donald Trump signed off on deeply contentious tariffs on Thursday.

The punitive tariffs on foreign steel and aluminum come into effect quickly and are almost certain to spark retaliatory sanctions from the European Union, China and other economic powers.

Moving to fulfil a protectionist campaign promise, Trump leaned on a little-used national security clause in US trade law to put a 25 percent tax on imports of steel and a 10 percent tax on aluminium.

The products are used in everything from cars to construction, roads to railways. Economists estimate billions of dollars of trade will be affected.

Hours before the signing, Trump told his cabinet that these products were the “backbone of our nation, they are the bedrock of defense industrial base.”

The mercurial 45th president compared his action to those of predecessors George Washington, Abraham Lincoln and William McKinley.

“Our greatest presidents” he said, “they protected our country from outside influence, from other countries coming in and stealing our wealth and stealing our jobs and stealing our companies.”

More than 50 percent of steel and aluminium exports come from allies in the European Union, Canada, Japan, and South Korea. But countries from Brazil to South Africa are likely to be affected.

Trump said he would be flexible toward “real friends,” touting an exemption for Canada and Mexico as they renegotiate a trade deal with Washington.

If an agreement on NAFTA is reached, he said, “it is most likely that we won’t be charging those two countries the tariffs.”

Trump added Australia to a list of likely carve-outs, and indicated that other trade and military allies could be exempted.

“We have a very close relationship with Australia,” he said. “We have a trade surplus with Australia, great country, long term partner, we’ll be doing something with them.”

But he singled out Germany for criticism, reviving a longstanding gripe that European NATO allies do not pay their fair share.

“We have some friends and some enemies where we have been tremendously taken advantage of over the years on trade and on military,” he said.

“If you look at NATO, where Germany pays one percent and we are paying 4.2 percent of a much bigger GDP — that’s not fair.”

Last week Trump stunned the world — and his own aides — with an off-the-cuff announcement of his tariff plan, before White House lawyers judged the legality of the move and before it was clear which countries would be targeted.

He cited Chinese overproduction and national security concerns as the main driver.

Since then, the White House has scrambled to catch up, Trump’s top economic advisor Gary Cohn — who opposed the move — quit in protest and stock markets have sunk.

“He may be globalist, but I still like him,” Trump joked on Thursday, alluding to an ideological clash within his administration that the “nationalists” appear to have decisively won.