• 4 days How To Invest In The Cybersecurity Boom
  • 6 days Investors Are Patient With Unprofitable Giants
  • 8 days Wells Fargo Back In The Scandal Spotlight Once Again
  • 10 days 5 Stocks To Keep A Close Eye On This Year
  • 11 days As Auto Giants Flail, Look To Chip Stocks For Gains
  • 12 days Central America Is Ready For The Bitcoin Hustle
  • 14 days China’s Video Game Restrictions Unlikely To Slow Down Booming Industry
  • 15 days Top Performing Stocks As Inflation Fears Grow
  • 16 days US Airline Stocks Take A Beating On New EU Restrictions
  • 17 days This IPO Could Open Sustainable Fashion Floodgates
  • 18 days Crypto Crime Nets Another $2B Fraudster
  • 20 days This Week’s Hottest Meme Stocks
  • 21 days Why World Markets Should Be Watching Germany Closely
  • 23 days Could ‘Cultured’ Meat Rival The Plant-Based Megatrend?
  • 25 days ‘Easy Money’: Crypto Is Still Attracting Newbie Investors
  • 27 days Foreign Syndicates May Have Stolen Up To $400B In COVID Benefits
  • 28 days Gold Jumps Above $1800 Ahead Of Jackson Hole Summit
  • 28 days International Banks Blacklist Afghanistan Following Taliban Takeover
  • 30 days China’s Tycoons Are Getting A Serious Reality Check
  • 31 days U.S. Cannabis Space Heats Up With Telling Tilray Acquisition
Tesla's

Tesla's "Battery Day" Could Deal A Blow To Cobalt Miners

Speculation points to a cobalt-free battery that…

New Breakthrough Could Transform Rare Earth Mining

New Breakthrough Could Transform Rare Earth Mining

Researchers at the University of…

Tom Kool

Tom Kool

Writer, Safehaven.com

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is now working as news editor for Oilprice.com and Safehaven.com

Contact Author

  1. Home
  2. Commodities
  3. Industrial Metals

Trump’s Trade War Turns Allies Into Enemies

Trump

To the shock of the Republican party, major U.S. allies and, well, probably even China, Trump announced today that hefty steel and aluminum import tariffs will apply to the European Union, Canada and Mexico, and retaliation is already in the works.

After being exempted from 25-percent steel tariffs and 10-percent aluminum tariffs earlier this year, the European Union, Canada and Mexico now have new targets pinned on them, with the administration defending the move Thursday as protecting national security.

Exemptions remain in place for South Korea, Brazil, Australia and Argentina, but deals apparently could not be reached with the EU, Canada and Mexico.

“The president’s actions are about protecting American steel, American aluminum,” White House spokesman Raj Shah told Fox news. “They’re critical for national security. And he’s worked to exempt certain countries and certain allies for which we have trading or security relationships. But in these instances it wasn’t possible and the president took action.”

Europe, Canada and Mexico will take action, too…

European Union leaders have vowed to retaliate with tariffs on U.S. good, while Mexico has said it will subject imports of U.S. pork, steel and other products to new tariffs.

More specifically, the EU said it would place an equal amount of tariffs on U.S. goods, which will likely come from its previous list when the tariff threat initially arose earlier this year.

Canadian Prime Minister Justin Trudeau said the steel and aluminum tariffs were "totally unacceptable" and a violation of a centuries-old relationship between the US and Canada. 

"These tariffs will harm industries and workers on both sides of the Canada-US border and will disrupt supply chains that have made North American steel more competitive across the globe," Trudeau said.

France minced words a bit less, with President Emmanuel Macron calling Trump’s tariffs “unlawful”, while German spokesman Steffen Seibert warned that “this measure brings the danger of a spiral of escalation, which in the end harms everyone”.

Related: Emerging Markets Face Financial Turmoil

Even the GOP was taken by surprise, and the timing is ill-thought-out as Republicans are scrambling amidst a decisive midterm election campaign.

There is “mounting evidence that these tariffs will harm Americans”, Politico quoted Senate Finance Chairman Orrin Hatch (R-Utah) as saying, while Sen. Ben Sasse (R-Neb) warned that this type of policy led to the Great Depression. “This is dumb. Europe, Canada and Mexico are not China, and you don’t treat allies the same way you treat opponents,” Sasse was quoted as saying. 

“’Make America Great Again shouldn’t mean ‘Make America 1929 Again’”, he said.

According to Politico, most senior Capitol Hill staffers weren’t even notified about the decision until late Wednesday night.

“This is a big mistake. These tariffs will raise prices and destroy manufacturing jobs, especially auto jobs,” Sen. Lamar Alexander (R-Tenn.), was quoted as saying, describing the tariffs as “basically higher taxes on Americans”.

For Canada, the largest exporter of steel to the U.S. by value, the news hits hard.

(Click to enlarge)

Source: CNN

The next drama on the world trade stage is likely to be even worse negotiating leverage for the U.S. over NAFTA.

Markets are expected to dip on this news. The Dow was already trading down 247 points by 2:48p.m. EST.

(Click to enlarge)

By Tom Kool for Safehaven.com 

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment