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Allies line up to impose retaliatory trade tariffs against US

Turkey and India become the latest Washington allies to impose millions of dollars in levies on American goods.

levies

Turkey and India announced on Thursday retaliatory tariffs worth hundreds of millions of dollars on goods imported from the United States, joining the growing list of Washington allies that have taken similar measures.

Ankara said it is imposing $266.5m of levies on imports of US automobiles, coal and several food items, in response to the  'ill-advised' and 'unsupportable' additional steel tariffs enacted by Washington, Economy Minister Nihat Zeybekci said.

The tariffs will also affect US products such as walnuts, almonds, tobacco, unprocessed rice, whisky, cosmetics, machinery equipment and petrochemical products.

"The total tariff burden today being imposed by Turkey on the US is commensurate with the additional costs Turkey faces due to the tariffs imposed on it by the US," Zeybekci said in a statement.

"They are proportional, measured and designed to protect Turkey's interests, while encouraging dialogue."

The United States is the fifth largest country where Turkey exports its goods and trade volume amounted to $20.6bn in 2017, official data showed.

US President Donald Trump decided in March to impose import duties of 25 percent on steel and 10 percent on aluminium, drawing criticism from other countries for heightening the risk of a global trade war.

In New Delhi, officials also announced on Thursday that it is imposing $240m worth of duties on American food products. The tariffs are expected to take effect from August 4.

"The tariffs would affect volumes of trade. The greater impact is in terms of the uncertainty created, with exporters on both sides not sure what will be covered next and by how much," New Delhi-based leading economist Jayati Ghosh said.

"For global trade the consequences are serious: if this continues, we will increasingly see unilateral protectionist moves," she added.

Risk of contagion

India had, for months, threatened to hit American goods, and had filed a complaint before the World Trade Organisation for US violations of global trade rules.

India’s commerce ministry has named some varieties of apples, almonds, chickpeas, lentils and walnuts that would carry higher import taxes.

Economist Ghosh said the world economy is in for a really rough ride as the risk of contagion could hit capital flight and exchange rate instability. Sharp selloffs could hit consumer and business confidence, she said.

The consequences of the escalating trade conflicts are already visible, according to some of the most powerful central bank chiefs who had gathered in Portugal to discuss the state of the global economy on Wednesday.

"What's happening is very disturbing. Can anyone think of a country that's made itself wealthier or more productive by building walls?" said Philip Lowe, head of the Reserve Bank of Australia, at the meeting.

In recent weeks Washington has also imposed tariffs on close allies like Europe, Canada and Mexico, as well as China.

'Unjustified decision'

The EU said retaliatory trade tariffs on a list of US products will come into force on Friday.

The tariffs will initially target a list of US goods worth $3.24bn, most of which will be hit with import duties of 25 percent.

They range from agricultural products such as rice and orange juice to jeans, whiskey, motorbikes and various steel products.

"We did not want to be in this position. However, the unilateral and unjustified decision of the United States to impose steel and aluminium tariffs on the EU means that we are left with no other choice," EU Trade Commissioner Cecilia Malmstrom said.

The commission formally adopted the new tariffs, allowing them to come into effect on June 22.

Meanwhile, Canada responded by imposing dollar-for-dollar tariffs on steel, aluminium and maple syrup.

Mexico also imposed tariffs on American products ranging from steel to pork and bourbon. Mexico is the largest export market for American pork producers.

China has also been affected by the trade tariffs. Earlier this month, Washington imposed tariffs on tens of billions of dollars of Chinese goods.

President Donald Trump said he ordered tariffs on $50 bln in Chinese goods.

China hit back by raising import duties on tens of billions of dollars of US goods including lobsters, soybeans, electric cars and whiskey. Beijing said it was responding in "equal scale" to Trump's tariff rise on Chinese goods.


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