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G-20 Tensions Simmer Over US Tariff Plan on Steel

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G-20 Tensions Simmer Over US Tariff Plan on Steel

Germany is among those nations, as a top exporter of steel to the U.S. The Germans are waiting to hear from President Donald Trump during the G20 summit, which begins on Friday in Hamburg, Germany.

G20 leaders will continue their meetings through the weekend, and Monday will likely reveal much about the way trade will shape up. To the contrary, major governments, including President Barack Obama's administration, have long recognized that global overcapacity is creating unsustainable downward pressure on producers' prices and that China's bloated state-run industry is the locus of that overcapacity. "It's not just the pricing, it's not just employment", Trump said in April at a ceremony ordering the review.

"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. A team from the firm wrote in a note in the month of December "the biggest threat to growth is a possible protectionist turn depressing global trade and even trigger trade wars". The U.S. also has accused China of shipping steel and aluminum to the U.S. through countries such as Vietnam and South Korea.

"Explained that the USA must fix the many bad trade deals it has made", he tweeted early Sunday.

The tariffs could very well provoke a global trade war.

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The Sept. 5 communique urged the OECD to help countries "enhance communication and cooperation", take "effective steps to address the challenges", and "encourage adjustment".

The final G-20 statement pledged renewed efforts to combat excess capacity in the steel industry, while referring to the use of "trade defense instruments".

The U.S. started cracking down on cheap steel imports in 2016 when Barack Obama was still president.

European countries would prefer a multilateral solution on steel, he said. He suggested putting on Chinese imports 45% tariff and said he would announce on his first day in the office that China was a currency manipulator, and he said proposing taxing imports from Mexico that he would rip up the trade deals and referred this as the Trans-Pacific Partnership, or TPP. 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.

It's noteworthy that Trump administration officials are mulling a scenario where they grant waivers or tariff quotas to ensure US allies and North Atlantic Treaty Organisation partners aren't unfairly targeted by any across-the-board tariffs. When it comes to trade policy, it's easy to shout "America first", but hard to define exactly what you mean by "America".

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