PLEASE WATCH THE VIDEO BELOW
As President Trump slaps huge tariffs on imports of steel and aluminium into the US, there is talk of an imminent all-out trade war. But is this really just Trump-style negotiating?
The US president, Donald Trump has announced 25% tariffs on steels imports into the US and 10% tariffs on aluminium imports.
Although the main target for these tariffs is believed to be China, other countries such as Mexico and Canada are effected as is the customs union of the European Union.
Although retaliating against the US by imposing import tariffs on US imports into the EU, Mexico or Canada could spark a wider trade war with the consequence of reducing global trade by about six percent according to the OECD, those parties have drawn up plans to do just that.
The EU has placed a complaint with the World Trade Organisation over this and certain imports from the US are being targeted with:
Canada imposing 25% tariffs on steel products such as piping, sheet and railway tracks as well as ten percent on such things as Yoghurt, soya sauce, strawberry jam, Orange juice, whiskies, coffee, soups and waters, Manicure and pedicure products, hair lacquers, shaving foam, toilet paper and dishwasher detergents.
Mexico will target Flat steel, hot and cold foil products, and piping. Cold cuts, pork chops and sausages. Berries, grapes, apples, various cheeses and lamps.
And in the EU: Bourbon whiskey, orange juice and cranberries. Jeans, T-shirts and tobacco. Corn and other agricultural products. Steel and industrial products. Cosmetics, consumer goods, motorbikes and pleasure boats. Snuff and chewing tobacco.
And the US motorcycle maker Harley-Davidson is already bracing itself for a hit to its exports. So, if you live in the EU and you're trying to offload a Milwaukee Hog, it might be worth hanging on a bit to see if the prices go up!
Anyway, a big point to note is that the latest UK steel import and export figures I can find from reports in 2017, show that the UK is the 18th largest exporter and importer of steel in the world and we imported 5.2 million metric tonnes of steel in 2016 and exported only 3.4 million metric tonnes. We are a net importer of steel.
Now, our response to this move by the US is tied to what the EU wants to do. We cannot shape a response to suit the UK.
As sovereign, independent nations, the Canadians and Mexicans can choose how they respond for the benefit of their own economies, hence the products they have chosen to target being different – the UK cannot do this.
Further the EU, by imposing such wide measures across the board with talk of safety in numbers and hitting the US hard, might well trigger further responses from the US etc etc etc and the downward spiral commences.
And anyway, the real problem at the root of all of this appears to be a global glut of steel. With producers struggling to offload the stuff, and some resort to breaking the rules to do it.
Back in October 2017 John Ferriola, chief executive of US group Nucor, said at the World Steel Association’s annual general meeting in Brussels that our current global overcapacity issue is bad and it results in a high level of exports that in some cases are illegally subsidised and dumped in other nations.
Now, having a viable steel producing capability (and aluminium come to that) is an important facet of defence to any sovereign nation – just because you don't build tanks today doesn't mean you won't need to build them quickly tomorrow.
So protecting your own steel production industry up to a point is understandable, but many believe that Trump has overplayed that claim by quite a margin.
But looking at the retaliatory measures that the EU wants to impose, are all those in the interests of the UK? Or could we do better, if we had control, by just adjusting our own metals import tariffs as well, so as to target the source of the problem without causing a global economic slowdown?
Just a thought.
And for another take on the situation, Jamie Robertson writing for the BBC puts forward the suggestion that this whole steel and aluminium tariff thing started by the Donald, might just be another of his heavy handed negotiating moves.
Channeling Clausewitz he writes:
"If real war is a continuation of politics by other means, a trade war might be a continuation of negotiations by other means."
And he goes on to give examples of how Trump has thought and acted big in the past by starting:
"……..with a big, indeed an eye-wateringly huge argument that shocks and confuses everyone – and then offer a compromise which is such a relief that no one realises how much they have lost."
Now back to the Full Withdrawal of the UK from the EU, better known as FWUKEU.
In a blunt and to the point manner, the rock singer Roger Daltrey has spelt out to the Telegraph exactly what his thoughts on Brexit and Europe are.
"I'm not anti-Europe, I'm anti-Brussels, but people don't get the distinction… That's why I'm so angry about it. I want someone at least answerable to me that I can say: "F**k off, you're useless!"
Short, sharp and succinct!