The US bull in a china shop!
The Trump administration is acting like a rampaging bull in a China (no pun intended) shop. There are no better words to describe its plan to impose tariffs of 25% on steel and 10% on aluminium imported from Canada, Mexico and the European Union under the pretext of ‘national security’. The Trump administration either does not realise the damage it can cause to its own efforts to gain co-operation from the Group of Seven (G7) member countries to challenge China’s trade practices, or it simply does not care about the consequences of its actions.
The US has been isolated at the G7 meeting of finance ministers and central bank governors in Canada. The Canadian foreign minister said in a statement that the tariffs were imposed under a “false pretext of safeguarding US national security”, while the Canadian finance minister wondered aloud how “Canada could in any way be a security risk” to the US. The Japanese foreign minister called the US action “deeply deplorable” and the French foreign minister stated that G7 had devolved into “G6 plus one” with the six expressing "total incomprehension" over the destabilizing move by the US.
The US tariffs have drawn a swift response from Canada, Mexico and the EU, which plan to retaliate with levies on billions of dollars of US goods, including orange juice, whiskey, blue jeans, steel, aluminium, Harley-Davidson motorcycles, pork legs, apples, grapes, cheese, steel and other products. The European Union and Canada have also filed challenges against the US tariffs with the World Trade Organization.
The imposition of tariffs by the US will not only undermine its own efforts to compel China to play by the rules of the game in international trade, but it will also unleash a global trade war that can inflict a heavy damage on the economies of all the countries, including the US. The US should play by the rules first before it can hope to garner support from its trading partners to pressurise China to do so. Unfortunately, the US under Donald Trump seems to be hell-bent on acting like a global bully.