wnol.info July 21 2018

Steel Tariffs To Play Major Role At G20 Summit

July 21 2018, 12:08 | Perry Erickson

AN anti G20 protester holds up a sign reading “Make climate change great again” on Saturday.—AFP

AN anti G20 protester holds up a sign reading “Make climate change great again” on Saturday.—AFP

The White House's National Economic Council has changed the Trump administration's approach to steel in the past week, people familiar with the strategy said.

President Donald Trump's threat to impose new steel tariffs is unnerving US allies and could create a toxic negotiating environment at the Group of 20 summit in Hamburg, Germany.

Moreover, trade diplomats fear USA security-based tariffs on steel would widen cracks in the global trading order, after Saudi Arabia, Bahrain and the United Arab Emirates cited national security at the WTO last week to justify their economic boycott of Qatar. But talk led to tension and the rest of the world was almost united in their opposition to Trump's agenda for the US -and the world.

The report found that other G20 economies inflicted 52 "hits" against USA commercial interests in the first half of 2017, 29% fewer than in the same period previous year, and a similar decline versus 2015.

Earlier this week, Abe and representatives of the European Union signed a political agreement for a trade deal that will cover more than a quarter of global economic output.

Also, invoking national security is all but taboo at the World Trade Organisation, the arbiter of worldwide trade rules, because it is largely seen as a way to wage economic warfare by citing arbitrary defense concerns.

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The EU might impose retaliatory duties on whiskey, orange juice and dairy products should the US decide to raise steel tariffs, the Financial Times reported that day.

Russian President Vladimir Putin has been clearer than most about his distaste for Trump's policies. They are hoping to galvanize other countries at the G-20 to work together to confront China over its government support for the domestic steel industry, with the idea that joint pressure could be more effective and remove the possibility that the United States has to move alone.

WTO Director General Roberto Azevedo told Reuters it would be concerning to see countries making national security demands within the WTO's dispute settlement system, the global trade court for the its 164 members.

"There is no doubt that this entire line of trade remedy actions regarding national security matters is going to be an issue", said Jacob Kirkegaard, a senior fellow with the Peterson Institute for International Economics. An administration official, however, told Reuters last week that the report would be released after Trump spoke with leaders at the Group of 20 summit in Germany later this week.

So despite some compromises, the USA still has a mechanism to declare a trade war over steel at any time.

America's biggest trade partners have taken far fewer protectionist measures against USA business so far this year, possibly because they're anxious about retaliation, according to the authors of the Global Trade Alert - published by the London-based Centre for Economic Policy Research. For example, U.S. Steel went up 8% in June. Enacting Section 232 also may violate World Trade Organization rules.

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