US automakers, in general, have much at stake as Trump makes decisions on problems such as the pending renegotiation of the North American Free Trade Agreement and an evaluation of fuel economy requirements through 2025.
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“Notably, China exported only $976 million of steel and $1.8 billion of aluminum products to the United States, or just six per cent of the $46 billion of USA steel and aluminum imports over which Trump is imposing tariffs”, Bown writes.
In addition to intellectual property infringements such as counterfeiting, Washington takes issue with Chinese investment rules that force US companies to transfer proprietary technology to do business in the country.
The issue is a core part of the probe being conducted under Section 301 of the Trade Act of 1974. That’s set off a race for USA allies to plead for special treatment, while China has warned of “strong” measures to protect its interests.
Why does no one talk about the elephant in the room with the new tariffs? The bloc does impose a 10 percent levy on US vehicle imports, while the USA charges a 25 percent levy on trucks and pickups, and up to 40 percent on some clothes, she said.
When China said Google and Facebook could not operate in China, it was declaring a trade war, and moreover, also declaring an ideological war.
Trump’s steel and aluminum tariff taxes won’t increase manufacturing jobs – they will reduce them.
“This is not a trade negotiation”, he said. In fact, the trade action is affected by the USA president’s decision.
Trump signed the proclamation on those tariffs last week and the exemption given Canada was a last-minute victory for the Canadian government.
He has started talks to renegotiate the North American Free Trade Agreement (NAFTA) and most recently imposed tariffs on steel and aluminum imports.
Merkel told ARD television that there needs to be a united European Union stance, talks with the US, and, if necessary, the will to take counter-measures. Their reach is in almost every sector of the US economy – and that gives the tariffs a wide and worrying reach.
“If the sources of all US steel and aluminum imports were part of this dispute, trading partners would be permitted to retaliate by a collective amount of $14.2 billion per year”, he writes.
So Trump’s metals tariffs look likely to be a self-inflicted wound for the United States – even if they don’t spark retaliation from trading partners, and even if they don’t weaken American alliances. But Washington has refrained from using this law since the WTO was established in 1995, since it conflicts with global rules prohibiting unilateral action on trade restrictions.
“That being said, any benefits attributable to tariffs are likely to be outweighed by costs”.
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As noted by Bloomberg’s Leonid Bershidsky, Trump’s gripes about the modest USA deficit in trade with the EU are overstated; almost 60 percent of US imports are “related party” goods and services produced by USA companies overseas, and American companies in Europe ($720 billion) significantly outproduced European companies in the US ($584 billion) in 2016. The European Union has threatened targeted retaliation on iconic US brands, including Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon whiskey, if the bloc fails to win an exemption. South Korea needs to closely monitor its exports to the U.S.as well as American companies’ move to file a complaint against Korean firms. The US makes a lot of internationally tradeable products that use steel – aircraft, autos, appliances and industrial machinery.
