Fear of trade war sends global equities into a tailspin

Lester Mason
March 15, 2018

"Trump's latest action in imposing trade tariffs must be seen in this context".

For Mr. Trump, simply demonstrating power means more than knowing to what end he is using it for.

US automakers are among the businesses with the most at stake, accounting for 38 percent of the aluminum and 15 percent of the steel consumed in the country, according to Ward's Automotive Reports. Gary Cohn, President Trump's top economic advisor, has announced his resignation due to the implementation of these tariffs.

EU Trade Commissioner Cecilia Malmstrom told the EU parliament Wednesday that while the 28-nation bloc would continue to seek an exemption from the USA measure that could kick in next week, it will prepare countermeasures to hit US exports.

"Imported aluminum used to make beer cans is not a threat to national security", said Jim McGreevy, the Beer Institute's CEO.

The level of tariffs needs to be distinguished from the worldwide system for dealing with tariffs.

He said, "The EU must be exempt from any tariffs".

Lighthizer cites Section 301 of the Trade Act of 1974, which authorizes U.S. authorities to create a "retaliation list" of goods to sanction in the event the USA feels threatened economically.

Sipilä agreed, expressing the view that tariffs are a short-sighted trade policy. The European Union (EU) is among those affected from the decision.

The move drew consternation outside the U.S.


Regardless of its impact on United States and Chinese tech companies, retaliation by Beijing is certain, but what that would look like is uncertain.

Trump is right that we've tolerated these abuses under a belief that to challenge them would violate principles of free trade.

A U.S. International Trade Commission investigation from 2011 found that IP theft cost U.S. producers almost $26 billion in losses in 2009 on copyrighted material alone.

"That is the reason why a few years ago we started trade negotiations with the US". In response, Trump urged Lighthizer to aim for an even bigger number - and he instructed administration officials to be ready for a formal announcement in the coming weeks, according to two people involved in the administration's trade deliberations.

Reuters reports that Trump wants tariffs on up to US$60 billion in Chinese imports, targeting the technology and telecommunications sectors.

While that is not a lot for the economy as a whole, it would be painful for the individual industry. If the U.S. were to impose tariffs on Chinese machinery, electronics and furniture and toys, it is likely to provoke some form of retaliation from Beijing, it said. Chancellor Angela Merkel, well-versed in dealing with the world's egomaniacs on the worldwide stage, is the best qualified to put an end to this absurd conflict with her sober and balanced manner - not least by curbing the forces demanding retaliation in Brussels and in other countries, like France.

The impact will be felt in the auto industry and businesses heavily reliant on steel - from the likes of Deere & Co.to oil drilling.

U.S. Commerce Secretary Wilbur Ross told lawmakers on Wednesday his department would soon publish procedures for product-specific exemptions from the steel tariffs for items that are not available from domestic producers or in short supply.

A JP Morgan analysis estimated that fiscal 2019 earnings per share for Deere & Co. could take a 9 percent hit because steel is the biggest contributor to its raw material costs. "We don't know how these tariffs will affect us yet, but we do help feed the world here in the Central Valley so I would think it wouldn't, but you never know".

European countries, many of which are North Atlantic Treaty Organisation allies, argue that they should also be exempt, and EU officials including European Commission President Jean-Claude Juncker have said that retaliatory tariffs include measures against classic American products such as bourbon.

Other reports by Iphone Fresh

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