Trump tariffs would damage global economies, warns International Monetary Fund


President Donald Trump has indicated on Twitter that his recently announced tariffs on steel and aluminum "will only come off" if an agreement is reached at the North American Free Trade Agreement (NAFTA) talks.

Trump raised the stakes by holding the NAFTA talks hostage to the new tariffs - 25 percent on steel and 10 percent on aluminum - as he repeated his claim that NAFTA was a "bad deal" that has taken jobs and companies out of the US. Harley already is being hit by a deepening slump in US motorcycle demand, which has spurred job cuts and a plant closure at the Milwaukee-based company.

China is threatening to retaliate to Trump's proposed new tariffs.

Canada must treat American farmers "much better", and Mexico must stop drugs from "pouring into the USA", he added.

A number of Republicans, including congressional leaders, urged Trump to hold back on the tariffs. The Canadian dollar was down 0.8 per cent to 76.9 United States cents, the weakest since July.

He believes that the price of steel and aluminum prices will go up and in turn US -made products will also be more expensive for both consumers in America and around the world. But Commerce Secretary Wilbur Ross, whose agency oversaw reviews of the industries that recommended the tariffs, said Sunday ABC's "This Week" that Trump is "talking about a fairly broad brush".

Trump was expected to finalize the planned tariffs later in the week, posing a tough challenge for U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo. The three will address the media in the afternoon.

The steel and aluminum tariffs were recommended by Commerce Secretary Wilbur Ross after a report from his agency concluded that the glut of the metals on global markets was a threat to USA national security. This can only be addressed at the source by working with key countries involved.

Trump's criticism of trade agreements and China's trade policies found support with white working-class Americans whose wages had stagnated over the years.

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The Canadian government is fighting on several fronts for an exemption: Foreign Minister Chrystia Freeland pressed Mr. Ross on the weekend and also sat down with a group of US congressmen led by Kevin Brady, chair of the powerful House ways and means committee, at the Canadian embassy in Mexico on Sunday, government sources said. Mr. Brady said Sunday that "all fairly-traded steel and aluminum" - including from Canada and Mexico - should be exempted from tariffs.

On Thursday, Trump announced that his administration would implement new tariffs on steel and aluminum imports.

Steel producers in Canada, Brazil, Mexico, South Korea and Turkey rely far more heavily on the United States market. Trump has promised to negotiate a better deal for America or withdraw.

And Finance Minister Bill Morneau said he had spoken with U.S. Treasury Secretary Steven Mnuchin, a more moderate member of the administration.

For U.S. manufacturers of cars, planes, and machinery, the tariffs present a two-fold threat.

European Commissioners are to discuss a formal response this Wednesday.

"We must not let our country, companies and workers be taken advantage of any longer", he said. They are meeting in Mexico City on Monday to wrap up the latest round of discussions. The American International Automobile Dealers Association quickly issued a statement against the plan.

"Obviously this is the time for cool heads but it is also a time for governments around the world - and alternative governments - to point to dangers of this sort of protectionism and the benefits of trade".