Stocks rebound after President Trump's 'trade war' threat


The European Union's trade chief on Friday warned of possible retaliation if US President Donald Trump's plans to impose hefty tariffs on imported steel and aluminium apply to Europe.

Instead, it was Trump himself who upped the ante in this high stakes game by announcing significant tariffs of 25% on imported steel and of 10% on imported aluminum.

One phrase of that tweet in particular, "trade wars are good", got immediate, widespread attention.

Trump insisted the move was necessary on Twitter, saying: "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".

"If America imposes duties on steel and aluminum and Canada doesn't walk away from NAFTA immediately, then make no mistake we will no longer be negotiating, we'll be capitulating", said Unifor national president Jerry Dias in a statement. "We will not sit idly while our industry is hit with unfair measures".

Republican US Senator Ben Sasse, who has been critical of Trump, said there were only losers in trade wars.

Hua Chunying, spokesperson for the Chinese Ministry of Foreign Affairs, said if other countries followed in the steps of the "will definitely inflict serious impacts to the worldwide trade order".

"American employees have borne the brunt of all the imported steel and aluminum that's been coming in", Ross told FOX Business' Stuart Varney.

Trump's official reasoning behind the tariffs, he said, was "absurd" and "contradicted the reality of global trade relationships". The president proposed a 25% tariff on steel and 10% on aluminum imports. Aside from the direct impact on the countries affected, Europe will need to protect itself from a flood of redirected metal because the not an open market anymore, he said.

"The potential for escalation is real as we have seen from the initial responses", he said in comments emailed to The Associated Press by a WTO spokesman.

Kosei Shindo, chairman of the Japan Iron and Steel Federation said that the move "will create a negative chain reaction affecting not only steel but also other products considered to have national security implications".

"They have a mercantile trade model in their heads that dates back 200 years", he said. His campaign rhetoric drew heavily on the perceived threat to traditional United States industries from foreign interlopers acting unfairly. "What Trump says and what he does are often two different things".

The Commission said that the countermeasures would now be discussed by the commissioners from the EU's 28 member countries on Wednesday.

The Canadian government began pressing for relief since it became clear in early 2017 that the US was considering invoking the excuse of national security to impose tariffs, a rarely used weapon in trade policy that has prompted fears of a historic trade war.

"But unless there's a follow through from trading partners in terms of retaliatory issues I don't think it's going to be that big an issue for the markets or the economy in general", said Noman Ali, a portfolio manager with Manulife Asset Management. But it's bad for companies that use the metals, and it prompted red flags from industries ranging from tool and dye makers to beer distributors to manufacturers of air conditioners.