Trade wars are 'easy to win', says Donald Trump as he lays down gauntlet to metal industries
Car makers warn of rising cost of buying vehicles as US president looks to bring in tariffs against steel and aluminium imports
US president Donald Trump said trade wars with other states are "good" and "easy to win", a day after his administration proposed punishing steel and aluminium tariffs set to hurt major producers, as well as China.
Mr Trump announced tariffs of 25 per cent on steel and 10 per cent on aluminium, materials that are the lifeblood of the construction and manufacturing sectors. The decision came despite fierce opposition from his administration.
But a defiant Mr Trump tweeted:
Mr Trump's announcement on Thursday is being widely viewed as a nod to his campaign promise of staunching imports and favouring local producers as part of his 'America First' policy. It comes amid rising protectionism in the world's largest economy.
His presidential campaign promises in 2016 hinged on creating more jobs in the local economy and putting an end to dumping of steel in the US by producers such as China, through levying of tariffs.
Global markets fell following Mr Trump's tweet as investors and policy makers in the US and the EU became increasingly concerned over the impact of higher tariffs on the pricing of the two base metals, which are intrinsically linked to global economic growth.
The FTSE 100 fell to a three-week low, while Germany's DAX languished in a six-month low. Analysts expect a similar impact on Wall Street when it opens to trading later today. The Dow Jones index saw a 420-point tumble on Thursday following the administration's tariffs decision.
Japanese carmaker Toyota has warned that the levying tariffs on steel and aluminium will lead to a rise in the price of cars and lorries in the US.
"The (US) administration's decision to impose substantial steel and aluminum tariffs will adversely impact automakers, the automotive supplier community, and consumers," Toyota said in a statement to Reuters.
The American Automotive Policy Council also denounced the Trump administration saying its decision would place the US industry, which supports around seven million jobs at "a competitive disadvantage".
While Mr Trump's rhetoric has often gone out in favour of an all-out trade war against China, one of the top producers of mostly low-priced steel globally, his decision - set to be inked next week - is likely to hurt Canadian, Brazilian South Korean producers the most.
According to the International Trade Administration and IHS Global Trade, steel imports from Canada and Brazil accounted for 16 and 13 per cent of all US imports as of September. South Korea followed with a 10 per cent share, with Mexico and Russia contributing 9 per cent each to meet US demand.
Updated: March 2, 2018 06:13 PM