Trump’s proposed tariffs will lead to deep global recession: WTO
The World Trade Organization (WTO) director-general has called on US President Donald Trump not to impose hefty tariffs on aluminum and steel exports, saying it could cause a deep global recession.
"An eye for an eye will leave us all blind, and the world in deep recession," Roberto Azevedo told members of his organization on Monday. We "must make every effort to avoid the fall of the first dominoes."
Last week, Trump announced that his country would impose a 25 percent tariff on imported steel and a 10 percent tariff on aluminum to protect American producers, but critics have said it would fail to boost jobs and risks starting a trade war with China.
The US oil and gas industry pounced on Trump's plan to slap tariffs on steel and aluminum, saying the controversial move would kill energy jobs by raising costs for big infrastructure projects.
The Thursday announcement was also met with swift threats from the international community, including key allies like the European Union and Canada, which pledged to retaliate if Trump makes good on his plan.
Trump’s controversial move also led to a drop in US stocks, with the Nasdaq, S&P 500, and Dow declining more than 1 percent. US steel, however, climbed 6 percent as investors eyed a potential drop in competition for American companies if the tariff plan goes ahead.
Trump believes the tariffs will safeguard US jobs but many economists say they will destroy more jobs than they create.
"It'll be 25 percent for steel and it'll be 10 percent for aluminum ... and it'll be for a long time," he said. "We’re going to build our steel industry back and our aluminum industry back."
However, America’s top energy industry trade groups, which rely on imported steel for drilling equipment, pipelines, liquefied natural gas terminals and refineries, issued statements calling on Trump to scrap the plan.
Trump is also facing resistance from politicians in his own party. Republicans have lobbied the president to reconsider his plans, but he has brushed off such demands saying, “We're not backing down” on steel tariffs.
House Speaker Paul Ryan, the top ranking Republican in the legislative body, asked trump not to finalize his tariff plans, saying that such an action could badly affect international markets.
"We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan," Ryan's spokesperson, Ashlee Strong, said. "The new tax reform law has boosted the economy and we certainly don't want to jeopardize those gains."
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