We may have just heard the first rattling of sabers in the trade war many predicted could come of Trump’s surprise tariff announcement last week.
In a call with British Prime Minister Theresa May, Trump got a stern warning from across the pond.
Trump announced last week that the plans to impose at 25 percent tariff of imported steel and a 10 percent tariff on aluminum. This, despite warning against it from economic experts, Republicans and even close confidants inside the White House.
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Many warned that doing so might provoke retaliatory tariffs on US goods exported abroad, and the beginnings of a trade war.
In the phone call with Trump, May warned in her own understated way that his unilateral approach to trade imbalances was unwelcome by her government.
“Multilateral action was the only way to resolve the problem of global overcapacity in all parties’ interests,” a spokesperson for the Prime Minister said.
The E.U. said it was considering a tariff on U.S. made cars. Trump fired back, as usual.
If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!
— Donald J. Trump (@realDonaldTrump) March 3, 2018
The announcement last week sent the stock market reeling in response as shockwaves rippled across the global economy. Rumor has it that the announcement came as something of a surprise even to those inside the White House. Trump seems to have made this decision privately, which explains why he ignored the contrary advice of so many experts and people seemingly on his side.
Wonder whether he’ll take credit for the whole thing if this does in fact trigger a trade war in which the US ends up the loser.