Asia's biggest exporters bristle over U.S. tariffs, fanning trade war fears

Asian Stock Markets

Major Asian nations reacted sharply on Friday to U.S. President Donald Trump’s decision to impose tariffs on steel and aluminum imports, warning of damage to relations amid industry calls for retaliation. 

Japan said the move would have a “big impact” on the countries’ close bilateral ties, while China said it was “resolutely opposed” to the decision and South Korea said it may file a complaint to the World Trade Organization. 

Trump on Thursday pressed ahead with the imposition of 25 percent tariffs on steel imports and 10 percent for aluminum on Thursday, though he announced exemptions for Canada and Mexico, and said exceptions could also be made for other allies. 

China, which produces half the world’s steel, will assess any damage caused by the U.S. move and “firmly defend its legitimate rights and interests,” the country’s Ministry of Commerce said. 

The tariffs would “seriously impact the normal order of international trade,” the ministry said. 

The European Union, Brazil and Argentina said overnight they should not be targeted or would seek exemptions, and both Japan and South Korea said they would ask to be made exceptions also.

South Korea, a key Washington Asian ally, is the third largest steel exporter to the United States, after Canada and Brazil.

The U.S. is the world’s biggest importer of steel, purchasing 35 million tonnes of raw material in 2017. Of those imports, South Korea, Japan, China and India accounted for 6.6 million tonnes. 

Trade tensions between China and United States have risen since Trump took office. 

China accounts for only a small fraction of U.S. steel imports, but its massive industrial expansion has helped create a global glut of steel that has driven down prices. 

China’s steel and metals associations urged the government to retaliate against the United States, citing imports ranging from stainless steel to coal, agricultural products and electronics. 

It was the most explicit threat yet from the country in an escalating trade spat. 

The dispute has fueled concerns that soybeans, the United States’ most valuable export to the world’s second largest economy, might be caught up in the trade actions after Beijing launched a probe into imports of U.S. sorghum, a grain used in animal feed and liquor.