US President Donald Trump has doubled tariffs on steel and aluminium imports, escalating tensions with China's Xi Jinping and other trading partners. Photo / Getty Images
US President Donald Trump has doubled tariffs on steel and aluminium imports, escalating tensions with China's Xi Jinping and other trading partners. Photo / Getty Images
US President Donald Trump says it is “extremely hard” to reach a deal with Chinese counterpart Xi Jinping, as he ramped up his global trade war by doubling tariffs on steel and aluminium imports.
The comments on Wednesday and higher levies came as Organisation for Economic Co-operation and Development (OECD)ministers gathered to discuss the outlook for the world economy in light of the US hardball approach to trade that has rattled world markets.
Trump’s sweeping tariffs on allies and adversaries have strained ties with trading partners and sparked a flurry of negotiations to avoid the duties.
The White House has suggested the President will speak to Xi this week, raising hopes they can soothe tensions and speed up a trade deal between the world’s two biggest economies.
US President Donald Trump's sweeping tariffs have sparked a flurry of negotiations. Photo / Getty Images
However, in the early hours of Wednesday, Trump appeared to dampen hopes for a quick deal.
“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” he posted on his Truth Social platform.
China was the main target of Trump’s April 2 tariff blitz, hit with levies of 145% on its goods and triggering tit-for-tat tariffs of 125% on US goods.
The OECD has cut its global growth forecast, citing the impact of Trump's tariffs on trade, consumption and investment. Photo / Getty Images
Both sides agreed to temporarily de-escalate in May, after Trump delayed most sweeping measures on other countries until July 9.
His latest remarks came hours after his tolls on aluminium and steel were doubled from 25% to 50%, raising temperatures with various partners.
The Paris-based OECD, a 38-nation grouping of mostly developed countries, cut its global growth forecast on the back of Trump’s levies, as ministers of the group held a meeting on Tuesday and Wednesday.
Trade, consumption and investment have been affected by the tariffs, OECD chief economist Alvaro Pereira earlier told AFP and warned that the US economy will suffer the most.
Appeals process
While some of Trump’s most sweeping levies face legal challenges, they have been allowed to remain in place for now as an appeals process takes place.
US Trade Representative Jamieson Greer and EU trade commissioner Maros Sefcovic are set to hold talks on the sidelines of the gathering, with the bloc seeking to stave off higher levies before the July 9 deadline.
With the latest US tolls on steel and aluminium kicking in, the European Union said it “strongly regrets” the decision to double the levies, cautioning that it “undermines ongoing efforts to reach a negotiated solution” with the US and warning it was ready to retaliate.
French Trade Minister Laurent Saint-Martin said: “We have to keep our cool and always show that the introduction of these tariffs is in no one’s interest.”
Canada, the largest supplier of the metals to the US, has called Trump’s tariffs “illegal and unjustified”.
After talks between British Trade Secretary Jonathan Reynolds and Greer on Tuesday, London said imports from Britain would remain at 25% for now. Both sides needed to work out duties and quotas in line with the terms of a recently signed trade pact.
Import duties set by the White House on metals have been described by Canada as “illegal”. Photo / Ross Setford
“We’re pleased that as a result of our agreement with the US, UK steel will not be subject to these additional tariffs,” a British Government spokesperson said.
The Group of Seven advanced economies – Britain, Canada, France, Germany, Italy, Japan and the United States – is due to hold separate talks on trade on Wednesday.
“We need to come up with negotiated solutions as quickly as possible, because time is running out,” German Economy Minister Katherina Reiche said Tuesday, on the sidelines of the OECD.
Mexico will request an exemption from the higher tariff, Economy Minister Marcelo Ebrard said, arguing that it was unfair because the US exports more steel to its southern neighbour than it imports.
“It makes no sense to put a tariff on a product in which you have a surplus,” Ebrard said.
Mexico is vulnerable to Trump’s trade wars because 80% of its exports go to the US, its main partner.
White House press secretary Karoline Leavitt confirmed Tuesday that the Trump administration sent letters to governments pushing for offers by Wednesday as the July 9 deadline approached.
