EU accuses Donald Trump of ‘holding a gun to its head’ in trade war

The EU accused Donald Trump of ‘holding a gun to its head’ yesterday after he failed to rule out a future trade war.

Theresa May and other EU leaders had expected the US president to exclude member states from tariffs on steel and aluminium in his package of business reforms.

But in a surprise move, Mr Trump said he was only willing to give the bloc a temporary reprieve, until May 1.

Donald Trump refused to rule out a trade war with the European Union 

Global markets were hit by fears that President Trump’s tariffs could trigger a trade war. China responded to news of the reforms by warning that while it did not want a trade war, it was ‘absolutely not afraid’ of one and ‘fully prepared’ to defend its interests.

Hong Kong’s Hang Seng index dropped by 2.5 per cent, while the Nikkei in Tokyo closed down 4.5 per cent.

This was followed by further falls in London, with the FTSE 100 off a more modest 0.4 per cent as the sell-off looked to be drawing to a close. In America, the Dow Jones rose in early trading but later fell into the red, closing down 1.8 per cent.

Mrs May extended her stay in Brussels at an EU summit to discuss the bloc’s response, amid fears that the US had simply delayed a trade battle with Europe. Leaving the event yesterday, the Prime Minister said of the temporary reprieve: ‘We want to ensure that does become a permanent exemption for the European Union.

‘The steel industry is important to the UK and I want to ensure that the steel industry and its workers are safeguarded.’

EU leaders yesterday said they would maintain a threat to hit the US with counter-measures, such as taxes on bourbon, Levis jeans and Harley Davidson motorbikes.

Hong Kong's Hang Seng index dropped by 2.5 per cent, while the Nikkei in Tokyo closed down 4.5 per cent

Hong Kong’s Hang Seng index dropped by 2.5 per cent, while the Nikkei in Tokyo closed down 4.5 per cent

In a statement, the bloc said it would ‘reserve its rights, in compliance with World Trade Organisation rules, to respond to the US measures as appropriate and in a proportionate manner’.

French president Emmanuel Macron added: ‘The EU must be united and determined… if we are attacked we will react without weakness.

‘We talk about everything in principle with a friendly country that respects WTO rules. Nothing should be addressed when it is with a gun to your head.’

Last night the World Trade Organisation Director-General Roberto Azevedo warned that creating barriers to international trade would ‘jeopardise the global economy’.

He added: ‘Disrupting trade flows will jeopardise the global economy at a time when economic recovery, though fragile, has been increasingly evident around the world.’ 



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