In a controversial move this week, US President Donald Trump has imposed steep tariffs of 25 percent for steel and 10 percent for aluminium imports to the US, which will take effect in two week's time.
The plan would exempt Mexico and Canada, while reserving the right to change the terms for other countries, including the European Union. But swift condemnations of Trump's protectionist policies were echoed all across the globe.
Axel Eggert, chief of Europe's main steel federation (EUROFER), warned that "the loss of exports to the US, combined with an expected massive import surge in the EU could cost tens of thousands of jobs in the EU steel industry and related sectors."
The EU produces 177 million tonnes of steel and exports around 5 million tonnes of steel to the US every year - a small share, overall.
According to Russell Jones, a partner at Llewellyn Consulting in London, Trump's move is a result of "a misguided policy, and if there's one thing that I've learned over the course of my career, it is that bad policies tend to end with bad macroeconomic outcomes."
"This is an increasingly desperate president who is in a rather chaotic state of mind at the moment, searching out for policies that he can actually put into practice which will appeal to his core domestic support, and protectionism is one of those policies. He doesn't actually need to have a great deal of support from Congress to put in place these initiatives and he sees himself as fulfilling some of the promises he's made during the election campaign," says Jones.
"But generally speaking, I think it's a president who is searching out to demonstrate that he can actually deliver something of substance."
Asked about the impact on the EU and the global economy, Jones explains, "The real concern about this whole process is we see rounds of retaliation and counter retaliation and so on...The tariffs that have been announced so far are relatively small... so they're not going to create a lot of damage to the global economy or to the European economy. But the real concern is what follows subsequently, and now that the United States has decided to go down this path, whether it can stop, whether the world can stop. There are plenty of examples from history.... Trade wars can be extremely bad, extremely damaging to the world economy."
Jones believes that both consumers and manufacturers would be casualties in a global trade war.
"At the end of the day, consumers will suffer and so will the industry", says Jones. "Protectionism is a recipe for inefficiency, it's a recipe for less competition, it's a recipe for higher prices and it's a recipe for lower productivity. There aren't really very many things good which come out of it... consumers and businesses everywhere will typically suffer considerable costs if this process is allowed to gather momentum."
Jacob Kirkegaard, at the Peterson Institute for International Economics in Washington, DC, believes that free trade is worth fighting for, because free trade "leads to more investment... more jobs in some sectors... leads to higher productivity, and ultimately higher living standards and that is certainly worth fighting for."
What people tend to forget, says Kirkegaard, is that free trade agreements will have "winners and losers - that's the nature of efficiency enhancing measures. But it is up to domestic policies to redistribute some of the gains, the overall bigger pie from a free trade agreement, making sure that parts of that additional wealth and economic benefit flow to those that lose from the free trade agreement - that has been forgotten here in the United States."
Also on this episode of Counting the Cost:
Geneva Motor Show: Tereso Gigi Gaudio, the CEO of Icona, discusses the futuristic, self-driving vehicles from this year's Geneva Motor show.
Vietnam trade: The Trans-Pacific Partnership (TPP) will get rid of tariffs for 11 countries and connect economies worth $10tr. One of the biggest winners is expected to be Vietnam, as Wayne Hay reports from Hai Duong.
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