Trump's economic views 'almost medieval'

Chinese steel imported into the US will also suffer the same fate as steel from the European Union (EU). Pictured is a steel factory in Dalian city (Liaoning province) - Photo: IMAGINECHINA

Interview with French newspaperDimanche JournalOn March 4, former WTO Director General Pascal Lamy (2005-2013) explained that the trade war that President Trump is trying to start on steel and aluminum imported into the US will result in increased production costs for US companies, not to mention the US will have to deal with economic retaliation measures from the European Union (EU).

If the EU wants to raise tariffs and create barriers that are already too much for American companies to do business there, we will simply impose tariffs on their cars that are freely imported into the United States. They have made it impossible to sell American cars (and many other things) there."

President Donald Trump wrote on Twitter on the evening of March 3

*Does President Trump Really Want to Impose Import Tariffs on Steel and Aluminum?

- Pascal Lamy:Trump has been asking for it for months. He walks into the office every morning with his tax returns, which he promised during the campaign. It’s one of his obsessions.

He has an almost medieval view of economics. For him, trade must be based on a win-lose mindset. He once made that clear to Angela Merkel: "Madam Chancellor, I have a problem. I see Mercedes in New York but no Chevrolets in Berlin."

So yes, he is about to carry out his threat but it certainly won't last long.

China does not want a trade war with the United States, but if the United States takes measures that harm China's interests, China will not stand idly by and will take countermeasures."

Mr. Zhang Ye Sui - spokesman of the Chinese People's Congress announced on March 4

If the US imposes import tariffs, German steel will be affected. Pictured are train cars carrying steel produced in Duisburg - Photo: AP

* Who is Mr. Trump aiming at, China or all exporting countries?

- It's still unclear. Mr. Trump will certainly cite national security concerns. He could exempt NATO members from tariffs on the grounds that they are US allies and impose tariffs on other countries, including China.

* Why can this measure only be implemented for a short time?

- Because the 25% import tax on steel and 10% on aluminum will push up prices, American industrialists will have to pay higher prices. When such taxes are imposed, the entire value chain will be damaged, especially for cars. In 2002, President Georges W. Bush decided to impose a tax on steel but eventually had to withdraw the decision.

Europe must defend itself and Europe will defend itself.

President of the European Commission Jean-Claude Juncker

*Could Trump's decision lead to a trade war with the EU?

- Not yetThe US-EU trade war is not over, but if the decision causes steel and aluminum exports from China or Brazil to affect the EU economy, the EU could apply retaliatory measures against US exports.

The EU has been anticipating retaliation for a fortnight now. The list of US exports includes items that EC President Jean-Claude Juncker has mentioned, such as Harley-Davidson motorcycles, Levi's jeans and bourbon. Florida orange juice could be added to the list.

Cartoon by Marian Kamensky (Austria) depicts President Donald Trump's desire to impose punitive tariffs on imported steel and aluminum.

*Trump's trade war isn't primarily aimed at the US export deficit, is it?

- Export deficitof the US is only related to China. 350 billion USD. This is a structural problem of Washington. For the past 30 years, the US has had a persistent trade deficit with Asia. First with Japan and North Korea, now with China.

Let’s not forget that China exports goods that it often assembles from American components. China has integrated into the American value chain. An iPhone made in Chengdu, China, is worth five times more to the United States than it would be to the place where it was made.

The US trade balance problem is macro. Americans consume a lot and save little. Trade alone is not a viable weapon to solve this problem. And the argument against unemployment is a lie. America is creating good jobs.

Mr. Trump wrote on Twitter that the trade war "is good and easy", after which stock market indexes, especially in Asia and Europe, were all red... He does not understand that the US is enjoying the advantage of the USD, which helps the US easily offset the trade deficit.

Australia worried about trade war

March 4, Australian Trade MinisterSteve Ciobo has warned that the looming trade war will only slow the world economy. "My concern is that if we continue to escalate this argument, and eventually economies impose tariffs on exports and imports, growth will slow down," he said.

On March 3, Chinese Foreign Minister Wang Yi said that the US ban on steel imports from other countries on the grounds of "protecting national security" is unreasonable.