The View From Asia

Trump's metal tariff hike leaves Asia jangled

Asia News Network editorial writers share their anxieties over US President Donald Trump's move to raise tariffs on steel and aluminium imports. Here are excerpts:

A short-sighted measure

Editorial

The Yomiuri Shimbun, Japan

This seems to be an imprudent move intended to retain the support of those who were his base during the presidential campaign. US President Donald Trump should realise there is nothing to gain but a flare-up of futile trade frictions by imposing tariffs unilaterally.

Mr Trump announced on March 1 that Washington would place tariffs of 25 per cent on steel imports and 10 per cent on aluminium imports. Although specifics have yet to be unveiled, the duties could cover Japanese products if applied broadly.

There is a view that a major target of the measure is China, which has been pushing to increase its exports. Meanwhile, the European Union and Canada announced they would take countermeasures immediately if the tariffs have adverse effects on them.

Slapping each other with countermeasures will impair the free trade system that the United States has promoted consistently since the end of Word War II.

Support from voters in places such as US Midwest steel industry areas was a decisive factor in Mr Trump's presidential victory.

If the import restrictions are intended to reinforce his support base ahead of the mid-term congressional elections in November, the move is significantly lacking in legitimacy.

It is also significantly problematic that Mr Trump cited a national security threat as the reason for imposing the import restrictions on the grounds that the exhaustion of the American steel industry could undermine the US' ability to procure materials for military use.

This punitive measure based on US law could constitute a violation of World Trade Organisation (WTO) rules. The WTO allows trade restrictions in exceptional cases on national security grounds. However, Mr Trump's claim is hardly convincing for reasons that include the US Defence Department's denial of difficulty in material procurement.

If countries start stretching the interpretation of national security in a tug-of-war, the WTO could become debilitated. As a superpower, the US should take the lead by exercising restraint based on free trade principles.


Winning trade war isn't easy

Editorial

China Daily, China

China is used to bearing the brunt of Washington's beggar-thy-neighbour trade protection measures.

But now, as the US threatens to impose high tariffs on imported steel and aluminium products across the board, all its major trade partners will feel the pain, which would lead to a series of repercussions that will affect the US' own interest, disrupt the global trade order, and ultimately risk derailing the world economy.


Steel products stored at a market in Shenyang, China's Liaoning province. President Donald Trump's plan to impose tariffs on aluminium and steel imports has been condemned by the World Trade Organisation and America's allies, including Canada and South Korea, which between them account for a quarter of US steel imports, whereas China accounts for just 2 per cent. PHOTO: AGENCE FRANCE-PRESSE

Since President Donald Trump announced the tariff plan, many of the country's biggest trade partners, including some of its traditional allies, have protested strongly against the move and warned they will take countermeasures.

It seems that not everyone is sufficiently astute to be able to view things from the right perspective and realise that protectionism destabilises the global economy.

There are no losers, only winners in global trade. If the global trade growth momentum is disrupted it will make all countries losers, including the US.

Last year, global trade registered 2.4 per cent year-on-year growth, up from 1.3 per cent in 2016, according to WTO estimates. The global trade recovery, however, remains fragile and the US' protectionism will only create adversarial stances that serve to impede it.

The argument against tariffs and trade barriers has been proved in the real world where free trading nations prosper while protectionist countries lag behind.

Mr Trump has claimed that winning a trade war is easy. If he persists in pursuing one, he will soon find out the hard way that is not the case.

No permanent friend or foe

Editorial

The Korea Herald, South Korea

A trade war whose scale could rise to threaten the global trade order looms large, as the US and major trading nations are threatening tit-for-tat actions against each other. This certainly poses a grave challenge to South Korea, whose economy relies on exports.

It may be too early to predict how many and how fierce the battlefronts will be, but the latest statements from President Donald Trump and leaders of countries such as China, the European Union, Canada and Mexico point to a large-scale trade war in the making.

China threatened to slap retaliatory tariffs on US farm products like soya beans, and the EU said it too could impose tariffs on signature American brands like Harley Davidson motorbikes and Levi's jeans. Canada and Mexico, both members of the North American Free Trade Agreement, also warned that they would take strong countermeasures.

These kinds of tit-for-tat retaliations are feared to raise the spectre of protectionism and endanger the global free trade system backed by the WTO.

With the world on the brink of the fiercest trade war in recent years, tasks lying before South Korea are evident. Most of all, both the government and businesses need to minimise negative impact on domestic industries.

South Korea had already felt heat from Mr Trump's protectionism as Washington slapped safeguard measures that push up import tariffs on washing machines and solar panels.

The 25 per cent tariff on steel products, South Korea's seventh-biggest export item to the US, also comes on top of anti-dumping and countervailing duties imposed on them. No wonder South Korea's steel exports to the US plummeted 38 per cent to US$3.25 billion (S$4.3 billion) last year from US$5.2 billion in 2014.

The new US action will deal a heavy blow to South Korean steel companies and they need to work together to minimise the impact by devising measures like raising competitiveness and diversifying export markets.

What is unfolding before us is also a good reminder that we need to make a complete review of trade policy with the US under Mr Trump. One certain thing is that when it comes to economic matters, there is neither a permanent friend nor enemy.


A severe jolt

Editorial

The Statesman, India

A trade war is brewing on either side of the Atlantic with Mr Donald Trump's overdose of protectionism by imposing tariffs on aluminium and steel imports.

The announcement has been greeted with a fair measure of consternation, notably in China and Britain where Prime Minister Theresa May has promptly debunked the economic measure as a "needless provocation of allies and enemies alike".

It could even be asked if the targeting of China could ruin attempts to reduce tension with nuclear-armed North Korea. Mr Trump's proposals have received measured support from the Pentagon which, while supporting the move, prefers a targeted rather than a unilateral system. Defence Secretary James Mattis has voiced concern over the impact on allies.

The decision has also been condemned by the WTO and America's allies including Canada and South Korea, which between them account for a quarter of US steel imports whereas China accounts for just 2 per cent.

Beijing has made its position clear by asserting that China would defend its interests. Chinese Vice-Foreign Minister Zhang Yesui favours negotiations and mutual opening of markets as the best ways to resolve trade conflicts.

In a word, the tariff hike, which supposedly mirrors Mr Trump's "America First" policy, has almost immediately effected a severe jolt to transnational economies.

The compulsion, quite obviously, is "to re-balance the global trade playing field" after Mr Trump's move. Close to a year after the Brexit referendum, Mrs May and the EU are on the same page.

Within 24 hours, there has emerged a latter-day Concert of Europe against America. There are few voices in the world today in favour of Mr Trump's praxis of protectionism.


 • The View From Asia is a compilation of articles from The Straits Times' media partner, Asia News Network, a grouping of 23 news media.

A version of this article appeared in the print edition of The Straits Times on March 10, 2018, with the headline 'Trump's metal tariff hike leaves Asia jangled'. Print Edition | Subscribe