Europe, IMF warn Trump of trade war

LUXEMBOURG / Reuters

Europe and the IMF urged Donald Trump on Wednesday to step back from the brink of a trade war, after the resignation of his economic adviser emboldened those encouraging him to push ahead with tariffs on imported steel and aluminium.
The departure of Gary Cohn, seen as a bulwark against Trump’s economic nationalism, hit shares, oil and the dollar, as investors saw an increased likelihood of tit-for-tat trade measures that would depress global growth. Trump plans to impose a duty of 25 percent on steel and 10 percent on aluminium to counter cheap imports, especially from China, that he says undermine US industry and jobs.
But that risks retaliatory tariffs on US exports — not least by Canada and Europe — and complicates talks on the North American Free Trade Area (NAFTA). “In a so-called trade war … nobody wins, one generally finds losers on both sides,” International Monetary Fund head Christine Lagarde said on Wednesday, adding that a trade war would take a “formidable” toll on global economic growth. In Geneva, China raised its concerns at the World Trade Organization where 17 other WTO members also voiced misgivings.
“Many said they feared tit-for-tat retaliation which could spiral out of control, damaging the global economy and the multilateral trading system,” WTO spokesman Keith Rockwell said. A trade official quoted Canada’s WTO ambassador as saying: “We fear that the United States may be opening a Pandora’s Box that we would not be able to close.”
Britain, keen to foster global trade relations as it prepares to leave the EU, said it was “very disappointed” by Trump’s plan.