Trade war: Europe's threats just a 'rounding error - US

  • 05/03/2018
Donald Trump.
Donald Trump. Photo credit: Getty

US President Donald Trump has spoken to world leaders about his planned tariff hikes on steel and aluminium and is not considering any exemptions to the measure, Commerce Secretary Wilbur Ross says.

"I know he's had conversations with a number of the world leaders," Mr Ross said in an interview with ABC's This Week on Sunday.

"The decision obviously is his but as of the moment, as far as I know, he's talking about a fairly broad brush. I have not heard him describe particular exemptions just yet," Mr Ross said.

On Thursday, Mr Trump said the US would apply duties of 25 percent on imported steel and 10 percent on aluminium to protect domestic producers, drawing a firestorm of criticism from trading partners and triggering a slide in stock markets.

Mr Ross played down the possible effects of the proposed tariffs on the US economy. He said the total amount of tariffs the US government is proposing is about US$9 billion a year, a fraction of 1 percent of the economy.

"So the notion that it would destroy a lot of jobs, raise prices, disrupt things, is wrong," Mr Ross said.

The commerce secretary dismissed European Union threats of retaliatory tariffs on flagship American products including Harley-Davidson motorcycles, bourbon and Levi's jeans as trivial and a "rounding error".

On Saturday, Mr Trump threatened European carmakers with a tax on imports if the EU retaliates.

Mr Ross said the Europeans were discussing a "pretty trivial amount of retaliatory tariffs, adding up to some US$3 billion of goods.

"In our size economy that's a tiny, tiny fraction of 1 percent," Ross said. "So while it might affect an individual producer for a little while overall, it's not going to be much more than a rounding error."

Chinese reaction

China does not want a trade war with the United States, Chinese Vice Foreign Minister Zhang Yesui says.

Mr Zhang made the statement on Sunday at a briefing ahead of China's annual session of parliament, which begins this week.

Trade tensions between the world's two largest economies have risen since Mr Trump took office in 2017, and although China only accounts for a small fraction of US steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.

Negotiations and mutual opening of markets were the best ways to resolve trade frictions, Mr Zhang said.

"China does not want to fight a trade war with the United States, but we absolutely will not sit by and watch as China's interests are damaged," Mr Zhang, who is a spokesman for parliament and was formerly an ambassador to the United States, said.

"If policies are made on the basis of mistaken judgments or assumptions, it will damage bilateral relations and bring about consequences that neither country wants to see."

Mr Trump believes the tariffs will safeguard American jobs, but many economists say the impact of price increases for users of steel and aluminium, such as the auto and oil industries, will destroy more jobs than curbs on imports create.

Nonetheless, there is growing bipartisan consensus in Washington, and support within the US business community, for the US government to counter what are seen as Beijing's predatory industrial policies and market restrictions on foreign firms.

Mr Trump has long sought a way to a more balanced trade relationship with China and is also considering potential trade sanctions against Beijing under a 'Section 301' investigation into China's intellectual property practices and pressure on foreign companies for technology transfers.