Yes it could have been worse. Do not be too relieved by the order on tariffs decided by Trump yesterday, which actually seems to be more limited than initially announced.

What has been decided:

Trump's order has set yesterday a tariff of 10% on aluminum and 25% on steel, BUT actually the executive order exempts Canada and Mexico (which account together for about 25% of USA's total steel imports).
Mr. President also said that other allies may be exempt.

In short, the short term impact for the economy is a lot better than initially previewed, but it is still bad

The problem:

the case-by-case approach is not going to be an easy task, and if the aim of this action was to increase the U.S. steel making industry for military purposes, imports from friends such as Canada are a bigger problem than imports from countries such as China, because Canada sells steel to the U.S. five times more than China.

Now, let's see how the WTO reacts to this order, would it be considered an outright repudiation of international rule? If so, long term consequences could indeed be rather severe.

The US was the architect of such rule-based order of World trading and the initiative of globalisation was always sponsored US, now, will Trump be the one looking to unravel this order?

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Sources:

• Reuters
• RT
• Photos taken from Pixabay

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