G-20 Tensions Simmer Over US Tariff Plan on Steel

G-20 Tensions Simmer Over US Tariff Plan on Steel

G-20 Tensions Simmer Over US Tariff Plan on Steel

President Trump, just back from his first G20 summit, is touting his trip to the gathering of world leaders as a "great success for the U.S".

The EU is not a large importer of steel from the USA, so the measure focuses more on goods that the EU brings in from the U.S., according to the report.

The report found that other G20 economies inflicted 52 "hits" against US commercial interests in the first half of 2017, 29% fewer than in the same period past year, and a similar decline versus 2015.

Trump's administration is weighing whether to impose tariffs, quotas or a combination of both on steel imports under national security grounds through Section 232 of the Trade Expansion Act, even though only a fraction of US steel is used for defense.

China pledged to reduce the country's annual steel capacity by as much as 150 million tons before 2020, but the country remains the world's largest steel producer and accounts for almost half of the globe's total steel production.

"Should the USA introduce tariffs on European steel imports, Europe is ready to react immediately and adequately", European Commission President Jean-Claude Juncker told reporters Friday ahead of the two-day summit of leaders from major industrial and emerging-market nations. If Trump announces the tariffs on steel imports, Juncker added that Europe's response would come in days following the decision, rather than months.

US steel prices are firm so far this week, holding onto their value despite the passing of the "deadline" for the Commerce Department's Section 232 investigation results last Friday. Juncker said that Europe expects to increase its exports to Japan by a third after trade barriers drop away.

German police officers detain an anti G20 protester in Hamburg
German police officers detain an anti G20 protester in Hamburg

During his four-day trip, Trump would travel to Poland and then to Germany to attend the G-20 Summit which among others is being attended by Prime Minister Narendra Modi. Trump initially wanted to remove the usual pledge to "fight protectionism" from their joint communique.

The tariffs could very well provoke a global trade war.

The European Union has already promised to retaliate if it is hit by US steel tariffs.

So despite some compromises, the US still has a mechanism to declare a trade war over steel at any time.

His counterparts are bracing for fresh surprises after Trump stunned the world by pulling out of the 2015 Paris climate pact, questioned long-standing North Atlantic Treaty Organisation allegiances and dismissed free trade principles.

Though WTO rules permit its members broad leeway to enact policies that ensure national security, such measures are rarely deployed due to a long-standing belief that the WTO exemptions should be used only for exceptional cases.

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