Trump’s steel curbs pose trade war risks

Bloomberg

There’s a risk of a global trade war should President Donald Trump decide to restrict imports of steel, according to Japan’s leading mills group, which warns any new US curbs on the metal may provoke a tit-for-tat response that could drag in other products.
Concern would deepen about the potential spread of protectionism if Trump acts, Kosei Shindo, chairman of Japan Iron and Steel Federation, said.
A trade fight beyond steel could happen if countries retaliated in other areas, such as farm products, Shindo said. The US administration has pledged stringent new measures to protect local steel producers against overseas rivals as Trump seeks to deliver on campaign-trail comments that trade is unfair. The potential for restrictions comes even as figures from China, which makes half of global supply, show that overseas sales have dropped sharply in recent months.
“If other countries respond with products other than steel, that would be opening a Pandora’s box,” Shindo said, noting that the European Union has
already said it will consider
retaliation if US takes action.
Earlier this year, Trump ordered the Commerce Department to probe steel imports under the seldom-used Section 232 of the Trade Expansion Act of 1962, which allows the president to impose trade measures if the government finds evidence of a national-security threat from foreign shipments.
The scope for retaliatory action in areas other than steel has also been flagged by producers in China. Li Xinchuang, vice-president of the China Iron and Steel Association, told the South China Morning Post in an interview that if Washington imposed additional tariffs on Chinese steel, that country could hit back by restricting imports of US autos and agriculture products.