US President Donald Trump struck a defiant tone on Friday, saying trade wars were good and easy to win, after his plan to put tariffs on steel and aluminium imports triggered threats of retaliation from trading partners and a slide in stock markets.
The European Union raised the possibility of taking countermeasures, France said the duties would be unacceptable, and China urged Trump to show restraint. Canada, the biggest supplier of steel and aluminium to the United States, said it would retaliate if hit by US tariffs.
The S&P 500 ended another turbulent week on an upbeat note Friday but major indexes posted their worst week of losses since early February as Trump’s threat to impose import tariffs on steel and aluminium rattled investors. The dollar fell against most currencies, dropping to its lowest in more than two years against the yen, as Trump’s tariffs proposal raised prospects of a damaging trade war.
Trump said on Thursday that a plan for tariffs of 25% on steel imports and 10% on aluminium products would be formally announced next week.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump said on Twitter on Friday.
In a later social media post, the Republican president said his aim was to protect US jobs in the face of cheaper foreign products, a familiar theme in the “America First” credo he campaigned on for the 2016 election.
“We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!” he wrote.
Trump earned some bipartisan support from lawmakers, mainly from America’s rust belt states.
“This welcome action is long overdue for shuttered steel plants across Ohio and steelworkers who live in fear that their jobs will be the next victims of Chinese cheating,” said Senator Sherrod Brown, a liberal and populist Democrat from Ohio.
However, Governor Scott Walker of Wisconsin, a fellow Republican, urged Trump to rethink the tariffs.
“If the president wants to protect good-paying, family-supporting jobs in America, especially here in Wisconsin, then he should reconsider the administration’s position on these tariffs, particularly on ultra-thin aluminium,” Walker said in a statement.
Many economists say that instead of increasing employment, price increases for consumers of steel and aluminium such as the auto and oil industries will destroy more US jobs than they create.