U.S. President Donald Trump took office in 2017 adopting a protectionist agenda focusing on making America great again. Since then, dark clouds on trade have gathered over the world’s two largest economies. China has a small segment on U.S. steel imports, though its massive industry expansion has helped create a global surplus of steel that has driven the prices down.
Trump is expected to impose tariffs of 25% on imported steel and 10% on imported aluminum this week. The White House is planning to offer Canada and Mexico a 30-day temporary exemption from new tariffs based on national security reasons.
The U.S. tariffs are expected to go into effect in two months. The target is to face cheap imports, especially from China, that Trump believes undermine U.S. industry and jobs. Trump is also considering trade sanctions against China into intellectual property practices.
China’s Foreign Minister Wang Yi said on Thursday, China is ready to respond in the event of a trade war with the United States while warning that such a war would be a lose-lose situation for both sides. U.S. soy beans, aircrafts and cars are widely seen as vulnerable to possible retaliation from Beijing.
Chinese exports for February were up 44.5% from a year earlier, beating market expectations, while imports grew 6.3%. As a result, China has a trade surplus of $33.74 billion for the month, and a January-February trade surplus with the United States of $42.92 billion.
At the same time, today the European commissioner Moscovici said that retaliatory measures against U.S. tariffs would be 'immediate'.