No new defence agreement underway with US: Turnbull

US President Donald Trump's new aluminium and steel tariffs will take effect on March 24. Kevin Lamarque  Reuters

US President Donald Trump's new aluminium and steel tariffs will take effect on March 24. Kevin Lamarque Reuters

Some of the US's closest trading partners have been left baffled by the freaky announcement and where it leaves them.

By no means should we emulate China.

Trump has called the tariffs a matter of national security while threatening to tax European vehicle imports and impose "reciprocal taxes" on countries that charge higher duties on USA goods than the United States now charges on their products.

Ross's meeting with the EU notwithstanding, the European Commission said no formal talks were scheduled with the address the steel and aluminum tariffs that go into effect on March 23.

The writer was chief United States trade negotiator with Japan in the Reagan administration. The term "overcapacity" is code for "China". Korean steelmakers import Chinese products to reprocess and re-export to the US.

President Donald Trump finally followed through on his nearly year-old threat to restrict imports of foreign steel.

Rather, the worry is that a widening trade war with layers of retaliatory tariffs would depress global trade, which grew 4.2 percent previous year, the most since 2011, on the fuel of the global economy. Regardless, the existing WTO agreement provides effective remedies for predatory pricing, whether based on overcapacity, preferential loans or potentially damaging export incentives. Following the directives of the Communist Party of China, these companies have increased steel production by 65 percent - and now account for 50 percent of world production.

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While it was not entirely clear whether the threat reflected actual U.S. policy or merely an effort by the president to play to an appreciative crowd, he had used similar language earlier on Twitter. This is something new - using national security as a trade guard.

Anand Mahindra, the Chairman of Mahindra Group tweeted on 8 March, Thursday, "Not sure why Indian markets seem so perturbed by the threat of global tariff wars".

"He does not want to understand its architecture, which is based on a rule-based system of open markets". At a time of low commodity prices (I grow corn and soybeans in Iowa) we're already losing money. Most significantly, these factual determinations and legal conclusions are subject to judicial review. Its findings were disturbing, with Commerce Secretary Wilbur Ross reporting that the quantities and circumstances of steel imports "threaten to impair the national security".

The EU, China and other affected exporting countries can all be expected to respond to the US' aggressive actions. He said that he will be imposing tariffs of 25 percent and 10 percent on imported steel and imported aluminium respectively.

The EU is also maintaining a threat of counter-measures that would target U.S. imports ranging from maize to motorcycles, and may publish its list next week to allow industry and other interested parties to give their input. The bloc does impose a 10 percent levy on US auto imports, while the USA charges a 25 percent levy on trucks and pick-ups, and up to 40 percent on some clothes, she said. This action should be seen as retaliation against the US Department of Commerce's investigation into aluminium foil late a year ago. In that respect, U.S. hi-tech companies could be vulnerable to retaliation. "We need a trade policy that's comprehensive".

In the first, he described China as "turning into the planet's most efficient assassin", and urged regulators to block Chinese acquisition of USA companies. That's where the United States jugular vein can be found, and that may well be where China strikes.

The negotiations between the European Union and U.S. are to win an exception for Europe from the tariffs, with Brussels seeking clarity on how to achieve that. China produces enough jeans to take up the slack - even Levis.

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