Trump plan to slap 25% tariff on steel imports may spark trade war

In a move that angered China and Europe, US President Donald Trump unveiled plans to impose 25% tariffs on steel imports and 10% on aluminium for a long period of time,  reports say.

Trump said that next week, he would approve the measure to protect US producers.

“You’re going to have protection for the first time in a long time,” he told executives from US metals manufacturers in a meeting at the White House.

Major steel and aluminium producing nations on Friday condemned Trump’s plan. Stock markets plunged on fears of an imminent tit-for-tat trade war.

If all countries followed the US example, there will be a serious impact on the international trade order, China’s foreign ministry spokeswoman Hua Chunying said.

European Commission chief Jean-Claude Juncker said the EU “will react firmly” to defend its interests.

Canadian Trade Minister Francois-Philippe Champagne said any tariffs or quotas imposed on Canadian steel and aluminium industry would be unacceptable.

The US Commerce Department found last month that US steel production was at about 70% of capacity in 2016 and called for tariffs to let the production reach 80% of capacity.

Trump’s announcement comes when China’s new economic guru Liu He is visiting Washington to avert a trade war which now looks inevitable. Liu is set to meet US officials but not Trump.

Before the announcement, Trump faced criticism from within too with some aides saying the move may damage US industry.