Rest of the world retaliates! Trump and the US to eat humble?

Specially baked and piping  hot from the oven for Trump and the war-waging US!

Rest of the world retaliates! Trump and the US to eat humble?

KUALA LUMPUR (March 2018): The US and its sitting president, Donald Trump, are experiencing a global backlash they never ever thought will happen.

The rest of the world is now retaliating against Trump and the US for threatening to impose tariffs on imported steel and aluminum.

The European Union (EU) is reportedly targeting some 2.8 billion euros (US$3.5 billion) of US goods ranging from T-shirts and whiskey to motorcycles and ladders should Trump go ahead with his plan to impose a 25% tariff on foreign steel.

And Goldman Sachs Group Inc. issued a comprehensive critique of Trump’s planned metal tariffs, saying that they risk damaging the world’s biggest economy by raising costs just as price pressures build, hurting allies more than others, and creating a two-tier global market.

Trump’s arrogance has now exposed the US’ fast deteriorating global influence, both economically and militarily.

I Love Malaysia-China Silk Road opines that the US, which has been waging war with sovereign states post World War ll (WWll), has lost touch with the rest of the world in the 21st Century digital era.

It looks like the US is unable to think out of the box since WWll to come up with peaceful global economic initiatives to serve the interests of both the US and the rest of the world.

This has left the US saddled with a national debt of between US$20 trillion and US$222 trillion! (Read this for context: https://ilovemalaysiachinasilkroad.blogspot.my/2018/01/is-us-debt-us20-trillion-or-us222.html)

With the arrogant Trump “running amok” globally like a gunslinger, has Trump led the US to bite off more than it can chew?

Trump and the US are now in a dilemma whether to go ahead with the proposed tariffs on foreign steel.

If they do go ahead with the imposition of the tariffs, clearly the US will be the biggest loser and the Americans themselves will suffer economically. Will the Americans let Trump do it?

Trump and the US will have to eat humble pie and lick its bruised ego if they backtrack and not impose the tariffs.

It’s a self-generated dilemma with no one else to blame but arrogance and big, big ego.

Here are three damning news reports against Trump and the US reproduced for the convenient reading of our followers:

"CHINA
Who Gains From Trump's Tariffs? China

This isn't the start of a trade war, it's friendly fire.

By Michael Schuman
March 2, 2018, 6:38 PM GMT+8

China's already been slashing steel capacity.
Source: AFP/Getty Images

If Donald Trump was aiming at China with his lofty proposed tariffs on imported steel and aluminum, he’s a terrible marksman. Not only will Chinese leaders likely brush off the measures. They have good reason to embrace them.

Play Video
Trump Says 'Trade Wars Are Good, and Easy to Win' - https://www.bloomberg.com/view/articles/2018-03-02/china-stands-to-gain-from-donald-trump-s-steel-tariffs

China is unquestionably the big, bad wolf of the global steel industry. With roughly ten times the steelmaking capacity of the U.S., it’s been widely accused of dumping cheap steel on global markets, pushing competitors in other countries to the wall. The Trump administration has previously prodded Chinese leaders to impose steep cuts on steel production to take pressure off U.S. mills -- to no avail.

The U.S. president clearly believes tariffs are the inevitable next step. Yet, any pain China feels from Trump’s import restrictions will be minimal. A measly 3 percent of total U.S. imports of steel products, by value, came from China in 2017. As Bloomberg economist Tom Orlik points out, China’s total exports of steel and aluminum to allcountries account for barely 0.5 percent of its GDP, and the share going to the U.S. is relatively small. Even losing access to the American market entirely would thus have a negligible impact on growth.

China has already been slashing overcapacity in its steel sector -- shutting down about 50 million tons in 2017 -- for its own purposes, both environmental and economic. While that trend will likely continue, the Trump tariffs aren’t going to affect the decision one way or another. (By way of comparison, the U.S. imported less than a million tons of steel from China last year.)

The tariffs will hurt some countries, though -- most prominently, America’s closest allies in Asia. South Korea accounted for almost 10 percent of all U.S. steel imports last year and Japan for nearly 6 percent. Even Taiwan, with a 4 percent share of those imports, could suffer more than China.

The same is true globally. Canada is the biggest supplier of steel to the U.S. The European Union worries that steel that might’ve gone to the U.S. will now find its way to Europe, pressuring local steelmakers even further.

Even if that doesn’t happen, China stands to gain. For one thing, unless the U.S. hands out exemptions to all of its allies -- which some, including Canada and Australia, are still hoping for -- the tariffs will make any sort of cooperation with America much more difficult politically. The U.S., EU and Japan agreed in December to work together to combat not only alleged Chinese steel dumping but intellectual-property violations; a true joint effort could have seriously undercut China’s push to acquire companies and cutting-edge technologies overseas. Now, any resistance is likely to be scattered, uncoordinated and thus less effective.

In Asia specifically, Trump is already seen as too soft on China and too rough on his close friends. He’s withdrawn from the Trans-Pacific Partnership, a trade pact meant to solidify U.S. alliances in the Pacific, and threatened to back out of a free-trade agreement with South Korea. Such steps have not only irked U.S. allies, but also raised serious questions about America’s long-term commitment to the region.

China has taken advantage of Trump’s mistakes to become even more assertive in its foreign policy -- harassing and threatening its neighbors over a range of security and territorial issues, further tightening its grip over the disputed South China Sea and forwarding its own diplomatic and economic agenda for Asia, such as the sweeping infrastructure development program known as “Belt and Road.” The only way the U.S. will be able to contest rising Chinese power -- not to mention tighten the squeeze on North Korea and press Pyongyang into negotiations over its nuclear and missile weapons programs -- is through tight coordination with allies such as Japan, South Korea, Australia and India. Any squabbling among them would suit China’s strategic interests just fine.

Maybe that’s why China’s reaction to Trump’s announcement has thus far been relatively mild, simply urging all countries to avoid unilateral trade restrictions. If the White House really wanted to cause China pain, it could have targeted a range of other industries, from electronics to shoes. Going after steel and aluminum isn’t the start of a trade war; it’s friendly fire.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Michael Schuman at contactschuman@gmail.com

To contact the editor responsible for this story:
Nisid Hajari at nhajari@bloomberg.net - BloombergView
EU proposes retaliatory tariff of 25% against US goods

CORPORATE NEWS
Tuesday, 6 Mar 2018
4:55 PM MYT

ThyssenKrupp AG's steel plant in Duisburg, Germany. Bloomberg

BRUSSELS: The European Union intends to target 2.8 billion euros ($3.5 billion) of U.S. goods ranging from T-shirts and whiskey to motorcycles and ladders should President Donald Trump go ahead with his plan to impose a 25 percent tariff on foreign steel.

The EU aims to apply a tit-for-tat levy on a range of consumer, agricultural and steel goods imported from the U.S., according to a list drawn up by the European Commission and obtained by Bloomberg News.

The commission, the EU’s executive arm, discussed the measures with representatives of the bloc’s governments at a meeting on Monday evening in Brussels.

The EU’s retaliatory list targets imports from the U.S. of shirts, jeans, cosmetics, other consumer goods, motorbikes and pleasure boats worth around 1 billion euros; orange juice, bourbon whiskey, corn and other agricultural products totaling 951 million euros; and steel and other industrial products valued at 854 million euros.

Trump’s vow to curb U.S. imports of foreign steel has sparked opposition within his Republican Party and is based on a national-security argument that the EU dismisses.

The White House threat risks provoking retaliation across the globe and a slew of complaints to the World Trade Organization, which has never ruled on a dispute involving trade restrictions justified on national-security grounds.

Growing Concerns

Europe has expressed growing concerns about Trump’s protectionist stance on international trade. The U.S. goods on which the EU intends to apply its own 25 percent tariff sends a political message to Washington about the potential domestic economic costs of making good on the president’s threat.

Paul Ryan, Republican speaker of the House of Representatives, comes from the same state -- Wisconsin -- where motorbike maker Harley-Davidson Inc. is based.

Earlier this week, Ryan said he was “extremely worried about the consequences of a trade war” and urged Trump to drop his steel-tariff plan.

European Commission President Jean-Claude Juncker and his leadership team are due to discuss the retaliation proposal at a meeting on Wednesday.

The commission is also weighing filing a complaint to the WTO against the U.S. and introducing “safeguard” measures to prevent steel shipments from other parts of the world to America from being diverted to the European market and flooding it. - Bloomberg/The Star Online

Goldman rips into Trump's tariffs plan as opposition builds

ECONOMY
Tuesday, 6 Mar 2018
4:12 PM MYT

Goldman Sachs Group Inc. delivered a comprehensive critique of Donald Trump’s planned metal tariffs.

SINGAPORE: Goldman Sachs Group Inc. delivered a comprehensive critique of Donald Trump’s planned metal tariffs, saying that they risk damaging the world’s biggest economy by raising costs just as price pressures build, hurting allies more than others, and creating a two-tier global market.

“Import tariffs make the U.S. less competitive by raising the prices of raw materials,” the New York-based bank said in a report received on Tuesday.

It added: “By imposing across-the-board tariffs to all steel and aluminum imports, the larger economic impact is on Canada, Mexico and the EU, and it ironically eases the economic impact to China and Russia.”

Trump’s plan has ignited a firestorm of opposition, with criticism from around the globe, senior members of his own party, and top manufacturers including Ford Motor Co.

As Goldman weighed in, BHP Billiton Ltd. delivered its own negative assessment, with the world’s biggest miner describing Trump’s move as a “black day for the world.”

Goldman’s report came as White House economic adviser Gary Cohn is summoning executives from U.S. metals users to meet with the president on Thursday to fight the curbs.

“The president has likely created a two-tier metal market,” analysts led by Jeff Currie wrote.

“Economically, a two-tier market is ultimately damaging to U.S. downstream industries that consume these metals, as it creates an uneven playing field for U.S. industries that face higher metal prices.”

Price Pressures

Goldman flagged the potential for the tariffs -- should they be imposed under Section 232 of the 1962 Trade Expansion Act -- to risk adding to inflationary pressures just as the Federal Reserve has been raising interest rates.

“The tariffs reinforce the reflationary pressure already under way globally.”

“Net consumers of steel and aluminum in the U.S. now face cost disadvantages relative to their international competitors, especially at a time when the labor market is tight and wage inflation is picking up,” the bank concluded.

“This is the irony of Section 232: a tariff intended to support U.S. industry may end up boosting margins and investment for a small subset of producers while leaving the broader economy at a disadvantage.” - Bloomberg/The Star Online"