Sunday 21 October 2018

Trump's trade war sets US at odds with G7 as business frets over rules

Bikers Michael Thompson, Mark Astle, Mark Ozzie Taylor and Ralph Zirkinitzer ride their Harley-Davidson motor bikes through the Gap of Dunloe, Killarney, Co Kerry, during Ireland Bikefest which took place this weekend. Harley-Davidsons were among the first products to be hit with EU tariffs. Photo: Don MacMonagle
Bikers Michael Thompson, Mark Astle, Mark Ozzie Taylor and Ralph Zirkinitzer ride their Harley-Davidson motor bikes through the Gap of Dunloe, Killarney, Co Kerry, during Ireland Bikefest which took place this weekend. Harley-Davidsons were among the first products to be hit with EU tariffs. Photo: Don MacMonagle
Donal O'Donovan

Donal O'Donovan

Blame China, Europe and others who are breaking trade rules, not Donald Trump, White House economic adviser Larry Kudlow said yesterday, as China warned that all commitments so far in talks with the US over trade will be withdrawn if the US imposes tariffs.

"Don't blame Trump," Mr Kudlow said on 'Fox News Sunday'. "Blame China, blame Europe, blame Nafta, blame those who don't want reciprocal trading, tariff rates and protectionism."

The US president's imposition of tariffs on steel and aluminium last week and the apparent impasse in US/Chinese trade talks has set the world's biggest economies on a collision course and provoked fear of tit-for-tat measures escalating into a global trade war.

Airline chiefs at a major conference in Australia over the weekend said they were on the front line. "Any measures that reduce trade and probably consequently limit passenger travel are bad news," Alexandre de Juniac, director general of the International Air Transport Association (IATA), said at the association's annual meeting in Sydney. The group represents airlines including Aer Lingus.

"We always get concerned when you start to see tensions elevate around global trade and free trade," American Airlines Group chief executive Doug Parker said.

The uncertainty could curb demand for business travel, a key driver of airline profits, said Gloria Guevara Manzo, chief executive of the World Travel and Tourism Council (WTTC).

U.S. President Donald Trump. Photo: Reuters
U.S. President Donald Trump. Photo: Reuters

"[Business travellers] need to wait and see what happens - will their business be impacted, do they need to diversify, go some other places. War in trade is not good," she said.

The annual IATA meeting brings together about 130 CEOs and 1,000 delegates. This year's event took place against a background of rising fuel costs and global trade tensions.

Both the US and China reported some progress in discussions over the weekend about how to reduce China's $375bn goods-trade surplus with the US, but Mr Trump's revival last week of a plan to slap tariffs on $50bn of Chinese imports has cast the talks into turmoil.

"If the US rolls out trade measures including tariffs, all the agreements reached in the negotiations won't take effect," state-run Xinhua News Agency reported yesterday, citing a statement from the Chinese team that met with a US delegation led by Commerce Secretary Wilbur Ross. The Xinhua report came after Mr Ross met Chinese vice premier Liu He for talks that Mr Ross called "friendly and frank, and covered some useful topics about specific export items".

"The US can't have its cake and eat it too," an editorial published by the state-run 'Global Times' said. The US "needs to choose between tariffs and exporting more to China".

The stakes are high for the global economy, which is cruising at its fastest pace of growth in seven years.

Finance leaders of the G7 group of big economies vented anger over the Trump administration's metal import tariffs on Saturday, ending their three-day meeting with a stern rebuke.

In a rare show of division, the six other G7 member countries issued a statement asking US Treasury Secretary Steven Mnuchin to convey their "unanimous concern and disappointment" about the tariffs.

"We're concerned that these actions are actually not conducive to helping our economy, they actually are destructive, and that is consistently held across the six countries that expressed their point of view to Secretary Mnuchin," Canadian Finance Minister Bill Morneau said at a news conference after the meeting ended in the Canadian mountain resort town of Whistler, British Columbia.

The statement, written by Canada, also called for "decisive action" to resolve the tariff dispute at a G7 leaders' summit starting this Friday in Charlevoix, Quebec.

Irish Independent

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