Published: Mon, March 05, 2018
Markets | By Erika Turner

May voices tariff worry to Trump

May voices tariff worry to Trump

During a CNBC interview on Friday, commerce secretary Wilbur Ross dismissed concerns that President Trump's plan to impose tariffs on aluminum and steel will raise prices for American consumers, arguing that a penny here and a dollar there "doesn't mean anything" to people.

Ross last month argued that steel is important to USA national security, and that current imports are hurting the domestic steel industry.

BMO Capital Markets analyst Edward Sterck told the Financial Times that the US lacks much flexibility to increase smelting capacity in the near term, so companies will have little choice but to pass on the 10% tariff on aluminum imports to the consumer.

Ross added, "I have not heard him describe particular exemptions just yet". "The decision, obviously, is his".

Numerous ministers from around the world have been in touch with Trump and administration officials including Ross, hinting at an intensive behind-the-scenes effort to change the USA president's mind, the commerce secretary said.

"We shall see, we shall see". I know that a lot of ministers from a lot of countries have been talking with the president. They have been talking with others.

American jobs are being hurt by the nation's growing trade deficit, Ross said, and we have to do something about that.

Trump ignited fears of a trade war and an outcry from U.S. trading partners when he abruptly announced plans for the tariffs.

British Prime Minister Theresa May said she raised her "deep concern" over the tariffs in a phone call with Trump on Sunday, her office said.

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During a meeting with USA steel and aluminum industry executives, part of which was open to the media, Trump provided no further details such as which countries will be subject to planned import restrictions.

"As to the idea of retaliation, sure there may well be some sort of retaliation, but the amounts that they're talking about are also pretty trivial".

"It's some $3 billion of goods that the Europeans have threatened to put something on". He said the total amount of tariffs the USA government is proposing is about $US9 billion a year, a fraction of 1 per cent of the economy. "While it might affect an individual producer for a little while, overall it's not going to be much more than a rounding error".

Larry Kudlow, the former Reagan administration economist who advised the Trump campaign, on Friday warned that the tariffs are a "blunt instrument" that could have adverse effects on US consumers and companies.

Peter Navarro, director of the White House National Trade Council, said exempting countries was a slippery slope.

Last month, the Commerce Department said Trump could determine that certain countries should be exempted from steel and aluminum import curbs "based on an overriding economic or security interest of the United States", suggesting he may exclude allies such as Japan, Canada and North Atlantic Treaty Organization countries from any action.

Trump invoked national security as the rationale for imposing the tariffs, without making any distinction between friendly suppliers like Canada and potential adversaries like China or Russian Federation.

South Korea shipped 3.6 million tons of steel products to the US a year ago, becoming the No. 3 steel exporter after Canada and Brazil, according to the US Department of Commerce. "But at this point in time there will be no country exclusions", Navarro said, without elaborating. The flood of Chinese steel has been blamed for the loss of US 50,000 jobs since 2000, a year before China joined the World Trade Organization.

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