07 Mar Proposed Trump steel and aluminium tariffs could spark global trade war
US President Donald Trump has revealed he will stick to the proposed hefty tariffs on steel and aluminium imports, despite the resignation of his top economic advisor Gary Cohn.
It is believed that Cohn was staunchly opposed to the controversial legislation that will impose a 25% tariff on steel imports and 10% on aluminium imports, which has been framed as a protectionist policy to prevent cheap Chinese metal entering the domestic market.
However, the tariffs are likely to damage trade relations with US allies such as Canada and the EU, which could spark a global trade war. Canada is the largest supplier of both steel and aluminium to the US, while some opposing the tariffs have suggested they could trigger counter-tariffs from the EU.
“There is a lot of concern among Republican senators that this could sort of metastasize into sort of a larger trade war, and many of our members are discussing with the administration just how broad, how sweeping this might be,” said Senate majority leader Mitch McConnell.
Consultancy group Wood Mackenzie said as much as 18 million tonnes of steel could be priced out of the US. After Canada, the largest steel exporters to the US are Brazil, South Korea and Mexico.