China Slams Trump’s Tariffs as Allies Hold Out Hope for Talks


China lashed out against new steel and aluminum tariffs, while officials and executives from several U.S. allies caught in the crossfire reacted more cautiously, embracing what the White House promised would be some flexibility in implementation.

In the U.S., heartened metals workers cheered the tariffs for promising to breathe new life into their industry. American manufacturers and farmers, though, warned the measures could jack up costs and risk painful retaliation.

China—the main target of Washington’s move—responded strongly Friday. The country’s commerce ministry promised to “take effective measures to protect China’s rights.” Chinese metal-industry trade groups called on Beijing to retaliate against U.S. imports—from stainless steel and electronics to coal and farm products.

The impact of the proposed U.S. tariffs on Chinese steelmakers is ultimately expected to be small, analysts say. While China produces half of the world’s steel, the vast majority isn’t exported, and shipments to the U.S. have waned since Washington imposed stiff penalties on Chinese steel products in 2011, they said.

U.S. steel industry leaders charge that real imports of Chinese steel are far higher because they come through third parties such as South Korea, which imports and refines cheap Chinese steel for re-export. The Trump administration promised it would sanction steel and aluminum from around the world—including from allies—to slow that flow.

Late Thursday, President

Donald Trump

made good on that threat, ordering tariffs of 25% on steel imports and 10% on aluminum, due to take effect later this month. But Washington provided enough wiggle room that some allies and steel industry executives held out hope they might avoid being targeted in the end.

The U.S. excluded Canada and Mexico, contingent on negotiations over the North American Free Trade Agreement. Washington said other allies might win exemptions depending on negotiations in coming weeks and months.

Many American allies, including South Korea, Japan and the European Union, lobbied hard to avoid the measures from the start. While some expressed disappointment Friday at not being exempted, they said they would take Washington up on its offer to negotiate.

Presiding over a meeting with steel industry leaders in Seoul, South Korea’s trade, industry and energy minister, Paik Ungyu, said the country would continue the diplomatic push and had been offered some hope by Mr. Trump’s comment that some U.S. allies could still be spared the tariffs.

The new tariffs will likely hit South Korea’s steel-pipe producers hard because they account for more than half of its steel exports to the U.S., said Ha Tae-won, a research analyst at the state-run Korea Development Bank in Seoul. Shares in South Korea’s Posco—the world’s third-largest steelmaker—fell more than 3% Friday.

In Tokyo, Japan’s Foreign Ministry said the country would review the actions in light of World Trade Organization rules, but he didn’t directly threaten retaliation—a sign that Japan is hoping to avoid inflaming conflict with its most important ally.

European Union trade chief Cecilia Malmstrom said Friday the bloc still hopes to be excluded from the tariffs, and that she will meet with U.S. Trade Representative Robert Lightizer and his Japanese counterpart,

Hiroshige Seko,

in Brussels on Saturday.

“We are still of the view that this decision is not good, is not good for the global economy,” she said. “We have claimed all the time that Europe is certainly not a threat to American internal security so we expect to be excluded.”

The EU has threatened retaliatory measures, including slapping tariffs on a range of U.S. exports like agricultural products, bourbon and bluejeans.

Still, there was some relief among foreign metal executives, including at Constellium NV, an Amsterdam-based maker of semifinished aluminum products, that the White House showed some flexibility at the last minute.

“It feels like the administration has listened to numerous voices that expressed concern about a broader tariff approach,” said the company’s chief executive, Jean-Marc Germain.

In the U.S., steel and aluminum executives and workers were heartened.

“He has gotten stuff done that I didn’t think was possible,” said Mike Buckingham, a 58-year-old steelworker. He intends to return to work on Sunday after

United States Steel

said it would restart a furnace this week at a plant in Granite City, Ill., ahead of the tariffs.

But that enthusiasm was tempered by warnings from American manufacturers that use foreign steel that costs could go up.

“We are disappointed that the president has decided to move forward with tariffs on steel and aluminum,” said Eric Fanning, chief executive of the Aerospace Industries Association. The trade group had warned that the tariffs would inflate the cost of military and commercial aircraft.

American farmers said they fear the tariffs could provoke China to retaliate with trade barriers on agricultural goods like soybeans. Last year, China bought $14 billion worth of soybeans from the U.S.

“We have seen that Brazil and Argentina are happy to take our place in the Chinese marketplace,” said Lynn Rohrscheib, chairwoman of the Illinois Soybean Growers.

Write to Wayne Ma at [email protected], William Horobin at [email protected] and Doug Cameron at [email protected]

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