Downing Street insisted today Theresa May remains confident she can strike a US trade deal despite Donald Trump’s threats of massive new steel tariffs.
The US President has rocked hopes of a major post-Brexit deal by launching salvos of rhetoric against trade deals he says undermine American jobs.
Mrs May spoke to Mr Trump last night to express grave concern at the threat to impose 25 per cent tariffs on steel imported to America.
If imposed Europe would be forced to respond in kind, launching a transatlantic trade war just as Britain leaves the EU to embrace a global free trade future.
President Donald Trump has doubled down on trade pressure, but Mrs May (pictured right in London today) urged him to think again about steel tariffs
Following the renewed tensions, Mrs May’s spokesman today said: ‘I think both the prime minister and the president have been clear on the importance of reaching a bilateral, post-Brexit trade deal.
‘The USA is our biggest trade partner, we invest over £500bn in each other’s economies and over 1million Americans work for UK companies, so you would expect us to remain close partners and continue to work at the highest levels to make the case for UK industry to the US government.’
The tit-for-tat began last week when Mr Trump called for 25 per cent tariffs on imported steel and 10 percent on aluminium to protect domestic producers.
The EU then hit back by suggesting it would hike duty on Harley-Davidson motorbikes, bourbon and American blue jeans.
That in turn prompted Mr President to up the ante by threatening to pump up taxes on car imports from Europe.
The row has raised fresh fears about a major international meltdown over trade, as Mr Trump follows through on his pledge to stop America being exploited by other countries.
In a phone call with the US leader last night, Mrs May urged him to cool the row and back down on the steel tariffs.
‘The Prime Minister raised our deep concern at the President’s forthcoming announcement on steel and aluminium tariffs, noting that multilateral action was the only way to resolve the problem of global overcapacity in all parties’ interests,’ a No10 spokeswoman said.
But soon afterwards Mr Trump tweeted: ‘We are on the losing side of almost all trade deals. Our friends and enemies have taken advantage of the US for many years.
‘Our Steel and Aluminum industries are dead. Sorry, it’s time for a change! MAKE AMERICA GREAT AGAIN!’
On the BBC’s Sunday Politics show yesterday, Cabinet Office minister David Lidington branded the threats ‘inadvisable’, saying: ‘Trade wars don’t do anybody any good.’
The US president reiterated his determination to act overnight saying America had been ‘taken advantage of’ for ‘many years’ and it had to stop
In a series of tweets over the weekend, Mr Trump stoked the row by warning that the EU was taking the US ‘for fools’.
‘If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US,’ he said.
‘They make it impossible for our cars (and more) to sell there. Big trade imbalance!’ he continued.
Last year, the US ran a $151billion trade deficit with the EU, accounting for about one-fifth of America’s $796billion global trade deficit.
‘The United States has an $800 Billion Dollar Yearly Trade Deficit because of our ‘very stupid’ trade deals and policies,’ Mr Trump said.
‘Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!’
In a series of tweets over the weekend, Mr Trump stoked the row by warning that the EU was taking the US ‘for fools’
The latest escalation in tensions came after the EU announced plans on Friday to target key imports from the US.
It was responding to Mr Trump’s threat of 25 per cent tariffs on imported steel and 10 percent on aluminium to protect domestic producers.
The move could be potentially devastating for UK and EU exporters.
Asked about the US move, European Commission president Jean-Claude Juncker told German TV: ‘We will put tariffs on Harley-Davidson, on bourbon and on blue jeans – Levis.
‘We are here and they will get to know us.’
A spokesman for German Chancellor Angela Merkel said US steel tariffs would hurt international commerce.
‘The German government will look very closely at this decision and then assess the impact on the German and European economies,’ the spokesman said.
‘We will put tariffs on Harley-Davidson, on bourbon and on blue jeans – Levis,’ said European Commission President Jean-Claude Juncker (pictured)
Figures from European steel association Eurofer show the US was the destination of about 15 percent of Europe’s steel exports in 2017.
Trade association UK Steel said the proposed measures would be an ‘extremely blunt’ reaction to a complex global problem.
Unite union national officer for steel Tony Brady said if the tariffs applied to the UK, they would be ‘devastating’.
Cabinet Office minister David Lidington yesterday rebuked the US, saying a trade war was in nobody’s interests.
Mr Lidington suggested the American authorities could overrule any tariffs, as they did in the case of aircraft manufacturer Bombardier when Mr Trump’s administration threatened huge duties on its C-wing planes.
The minister said: ‘We’ll have to see what happens, I mean there was a lot of concerns recently about something comparable with regards aviation and the aircraft that were being produced in part by Bombardier in Belfast in Northern Ireland, and the American authorities at the end of the day struck that down, they said no that is not the way that we should be going.’
And he warned Mr Trump that Britain’s experience showed his plan would not work.
‘We tried in Britain in the 60s and 70s protecting our car industry from competition,’ Mr Lidington said.
‘It actually didn’t work, it protected inefficiencies, we lost all our export markets because our competitors who were more competitive went out and gobbled those up from us, and the car industry had to go through a very, very painful restructuring to get to the success story it is now.’
A Downing Street spokesman said last week: ‘We are engaging with the US on what this announcement means in practice.
‘We are particularly concerned by any measures which would impact the UK steel and aluminium industries.
Downing Street said last week that Theresa May is ‘concerned’ by Mr Trump’s threats about the steel industry
‘Over-capacity remains a significant global issue and we believe multi-lateral action is the only way to resolve it in all parties’ interests.’
The issue is particularly sensitive given the UK’s hopes of striking a post-Brexit trade deal with Mr Trump’s USA.
China has made clear it is ready to hit back if economic sanctions are brought forward against its interests.
‘China doesn’t want a trade war with the United States,’ said a spokesman for the National People’s Congress.
‘But if the US takes actions that hurt Chinese interests, China will not sit idly by and will take necessary measures.’
Canada also has said it will retaliate against any US tariffs on steel and aluminum.
Australia’s trade minister has spoken with his US counterpart to seek an exemption to Trump administration tariffs on steel and aluminium exports.
‘Unfortunately, at this stage, it is not clear to me or to Australia whether or not we will be captured by the president’s announcement,’ Steve Ciobo told Sky News on Sunday, after speaking with US commerce secretary Wilbur Ross on Saturday.
Trump officially has until April 11 to announce his final decision on a steel tariff.
An analyst at Jefferies said they expected the final policy to be more nuanced than a blanket tariff, due to a mounting pushback from domestic steel consumers and foreign steel suppliers.