Trump's proposal was widely condemned across the globe. Canada's Prime Minister, Justin Trudeau, said any U.S. tariffs on steel and aluminum imports would be "absolutely unacceptable" and European Commission President Jean-Claude Juncker said it "can only aggravate matters."

Critics have also warned that tariffs will result in higher prices for consumers. On Thursday, Toyota said they would "substantially raise costs and therefore prices of cars and trucks sold in America."

However, Commerce Secretary Wilbur Ross told CNBC on Friday that price increases from President Donald Trump's tariffs are "no big deal." He said they will have a "broad" but "trivial" impact.

Shiller, an economics professor at Yale University, said that tariffs have been trending down for decades thanks to the general growth and prosperity around the globe.

"Low tariffs help the whole world organize itself better and helps relieve inequity," he said. "The unfortunate thing, though, is that it does harm some American workers. We have to consider that."

He also doesn't dismiss critics who say China has been manipulating the steel market, creating an unlevel playing field. While he believes there are such manipulations, he said people like Peter Navarro, a China hawk who serves as White House National Trade Council Director, are overstating the issue.

"It's good for the whole world if China prospers. We want to see everyone growing. That helps bring peace and tranquility and more good for us," he said.

The White House did not immediately respond to a request for comment on Shiller's remarks.</s>TOKYO, March 2 (Reuters) - Toyota Motor Corp said on Friday U.S. tariffs on imported steel and aluminum would substantially raise costs and therefore prices of cars and trucks sold in America.

“The (U.S.) Administration’s decision to impose substantial steel and aluminum tariffs will adversely impact automakers, the automotive supplier community and consumers,” the automaker told Reuters.

Toyota added that more than 90 percent of the steel and aluminum purchased for cars built in the United States is sourced from the country.

President Donald Trump announced on Thursday he would impose hefty tariffs on imported steel and aluminum to protect U.S. producers, risking retaliation from major trade partners like China, Europe and neighboring Canada.

Trump said the duties of 25 percent on steel and 10 percent on aluminum would be formally announced next week although White House officials later said some details still needed to be ironed out. (Reporting by Minami Funakoshi; Editing by Lincoln Feast)</s>President Donald Trump’s latest trade salvo over steel and aluminum landed squarely in the middle of NAFTA talks, overshadowing efforts by his own negotiators and those from his biggest export markets to update America’s most important free-trade agreement.

After a day of will-he-or-won’t-he chatter, Trump announced Thursday he intended to slap tariffs of 25% on steel imports and 10% on aluminum imports. Specifics are unclear, including whether some countries may still be exempt, but the implications rippled through the seventh round of talks on the North American Free Trade Agreement in Mexico City.

Canada threatened to fire back, in some of its toughest language against the Trump administration since NAFTA talks began last year, and a person familiar with Mexico’s position said the nation plans to do the same. Canada is the top provider of both U.S. steel and aluminum imports, while Mexico is the fourth-biggest steel provider. Various industry groups condemned the U.S. move and warned it would start a trade war.

While U.S. data shows NAFTA plays only a partial role in trade of the two metals, the effect could be much broader. The regional content requirement for cars, for instance, is arguably the biggest sticking point in work to update NAFTA, including whether and how to track the source of steel used to build them. Work to find a solution already was delayed this week when Trump’s lead negotiator on the issue was called back to Washington.

“These tariffs are yet another example of the highly protectionist America First agenda playing out in real time,” said Adam Taylor, a principal at Export Action Global and former Canadian trade official. “That they come right in the middle of NAFTA negotiations is worrisome as Mexico and Canada see modernizing as enhancing and upgrading NAFTA while the U.S. views the NAFTA 2.0 talks as a way to erect new barriers.”

Representatives of the Canadian steel and aluminum sectors each said they’re holding out hope Canada will be exempt. The president of the United Steelworkers union, Leo Gerard, made a similar request, and Mexican Economy Minister Ildefonso Guajardo traveled to Washington on Wednesday and met with Commerce Secretary Wilbur Ross to ask for the same exclusion and make clear that the nation would retaliate if hit with tariffs -- echoing the plans of the European Union.

The United Steelworkers supported new tariffs, Gerard said in a statement, but “it will be critical to focus attention on the countries that have created the problem,” not all countries. “Any solution must exempt Canadian production,” Gerard said.

In terms of relations, a 2009 dispute -- when Mexico imposed retaliatory tariffs on about 90 American products totaling $2.4 billion worth of annual exports, serves as an example of what the nation can do in response to a U.S. move -- according to a person close to the Latin American country’s position, who asked not to be named.

In the spat that year over trucking, Mexico took retaliatory action in response to the U.S.’s refusal to implement a cross-border trucking plan agreed to under NAFTA. That helped contribute to a 26% decline from the previous year in American agricultural exports to Mexico and affected products including wine, toothpaste, pork, onions and mineral water.

The seventh round of NAFTA talks began Feb. 25 and concludes March 5, when the cabinet figures leading talks for the three countries are expected to meet. Negotiators have wrapped up four chapters of about 30 so far, and talks could conceivably run for the rest of this year and even into 2019.

Steel and aluminum don’t overwhelmingly use NAFTA. While the U.S. bought $25.6 billion in iron, steel aluminum and articles of the metals in 2017 from Canada and Mexico, just 22% of it was traded under NAFTA, according to U.S. International Trade Commission data.

Canadian Foreign Minister Chrystia Freeland fired back at Trump’s threat Thursday, calling it “absolutely unacceptable” to include Canada in steel and aluminum measures and underlining that the country is also the top buyer of U.S. steel.

“It is entirely inappropriate to view any trade with Canada as a national security threat to the United States,” she said in a statement. “Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers.”</s>SEOUL/SYDNEY (Reuters) - U.S. President Donald Trump’s planned tariffs on steel and aluminum risk retaliation from other economies and could cost jobs, Australia’s trade minister said on Friday, while China predicted harm to trade if other countries follow the example of the United States.

Fears of an escalating trade war roiled Asian markets, hitting the share prices of steelmakers and manufacturers supplying U.S. markets particularly hard.

U.S. stock futures pointed to a steady start on Friday after a sharp fall following Trump’s Thursday announcement.

Trump said the duties of 25 percent on steel and 10 percent on aluminum would be formally announced next week, although White House officials later said some details still needed to be ironed out.

“The imposition of a tariff like this will do nothing other than distort trade and ultimately, we believe, will lead to a loss of jobs,” Australian trade minister Steven Ciobo told reporters in Sydney.

“My concern remains that on the back of actions like this we could see retaliatory measures that are put in place by other major economies. That is in no-one’s interest.”

Australia, which has championed the free-trade Trans Pacific Partnership that Trump pulled the United States out of, has sought an exemption for its steel and aluminum exports to the United States, Ciobo added.

“All countries steel and aluminum industries are facing difficulties,” Chinese Foreign Ministry spokeswoman Hua Chunying told a regular briefing in Beijing.

“China urges the United States to show restraint in using protective trade measures, respect multilateral trade rules, and make a positive contribution to international trade order.”

Steel has become a key focus for Trump, who pledged to restore the U.S. industry and punish what he sees as unfair trade practices, particularly by China.

Although China only accounts for 2 percent of U.S. steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.

“The impact on China is not big,” said Li Xinchuang, vice secretary-general of the China Iron and Steel Association. “Nothing can be done about Trump. We are already numb to him.”

South Korea, the third-largest steel exporter to the United States after Canada and Brazil, said it will keep talking to U.S. officials until Washington’s plans for tariffs are finalised.

“For us, the worst case scenario was a 54 percent tariff,” said a South Korean trade ministry official who declined to be named as he was not authorized to speak to media.

Nonetheless, if Trump pursues his proposal for a 25 percent global steel tariff,“that will still affect our steel exports to the U.S,” the official added.

Canada, Brazil and the EU said they would look to take action over the tariffs.

Moody’s Investors Service noted that steel and aluminum are not a major economic factor even for big Asian exporters, typically accounting for less than 1 percent of gross domestic product or exports.

Asian steelmakers, however, do worry U.S. tariffs could result in their domestic markets becoming flooded with steel products that have nowhere else to go.

“We are concerned about how other exporters react, what will happen with steel that cannot be sold to the U.S.,” Vikrom Wacharakrup, chairman of the Federation of Thai Industries’ iron and steel industry group, told Reuters. Thailand exports steel mainly to Asia but also the United States.

The Trump administration also cited national security interests for its action, saying the United States needs domestic supplies for its tanks and warships.

Contrary to the action announced by Trump on Thursday, the Department of Defense had recommended targeted steel tariffs and a delay in aluminum duties.

“We continue to seek clarification,” said Japanese Trade and Industry Minister Hiroshige Seko.“I don’t think exports of steel and aluminum from Japan, which is a U.S. ally, damages U.S. national security in any way, and we would like to explain that to the U.S.”

India also raised concerns about the use of the U.S. national security interest provisions, under what is known as a Section 232 investigation.

“We have only 2 percent of our exports to U.S. so no immediate dent, but validity of Section 232 is stretched to be used as a tariff barrier,” India’s Steel Secretary Aruna Sharma told Reuters.

Trump believes the tariffs will safeguard American jobs but many economists say the impact of price increases for consumers of steel and aluminum, such as the auto and oil industries, will be to destroy more jobs than they create.

Japan’s Toyota Motor Corp said the tariffs would substantially raise costs and therefore prices of cars and trucks sold in the United States.

Asian steelmakers suffered, with South Korea’s POSCO and Japan’s Nippon Steel & Sumitomo Metal Corp both down more than 3 percent.

“The world stands on the brink of a trade war as Donald Trump announces severe tariffs on steel and aluminum - forget the yield curve - this is how recessions start,” said Robert Carnell, head of research, Asia-Pacific at ING in Singapore.

“Trade is just about the only thing economists are agreed on - more is better,” he said.</s>WASHINGTON — President Donald Trump’s vow Thursday to slap tariffs on imported steel and aluminum spooked investors, raised fears that other nations would punch back with their own sanctions and threatened to raise prices for U.S. consumers and companies that use steel and aluminum.

Here’s a close look at the tariffs and their potential to trigger a trade war and bruise the U.S. economy:

What exactly did Trump do?

The president said that sometime next week, he will formally announce tariffs of 25 percent on imported steel and 10 percent on imported aluminum. It’s unclear whether any countries would be exempt from what would amount to a heavy new tax on imports. That tax would, in turn, make imported steel and aluminum more expensive for American companies and individuals who use goods containing those materials, ranging from cars to air conditioners to beer cans.

Trump had directed the Commerce Department nearly a year ago to investigate whether imported steel and aluminum posed a threat to national security. The premise is that a healthy industrial base is crucial to the nation’s military. The Trump administration has said, for example, that America now has only one smelter that provides the high-purity aluminum that military aircraft require.

Commerce last month issued its conclusion that national security concerns justified sanctions on steel and aluminum imports. Among its recommendations were across-the-board tariffs of 24 percent on steel and 7.7 percent on aluminum. Trump said Thursday that he wants even higher tariffs.

In his decision, Trump deployed a little-used weapon in U.S. trade law: Section 232 of the Trade Expansion Act of 1962, which authorizes the president to restrict imports and impose unlimited tariffs on national security grounds. Since the United States joined the World Trade Organization in 1995, it has pursued only two such investigations. On both occasions — a 1999 case involving oil imports and a 2001 case concerning iron ore and steel imports — the Commerce Department declined to recommend sanctions.

What’s the likely impact on companies and the economy?

American steel and aluminum producers would benefit from a tax on imports and the higher prices that are likely to result.

“You will have protection for the first time in a long while, and you’re going to regrow your industries,” Trump told U.S. aluminum and steel company executives at the White House.

But there’s a flip-side to that calculation: Fewer choices and higher costs for companies that buy steel and aluminum and for their customers.

“Tariffs on steel and aluminum are a tax hike the American people don’t need and can’t afford,” said Utah Republican Orrin Hatch, chairman of the Senate Finance Committee. “I encourage the president to carefully consider all of the implications of raising the cost of steel and aluminum on American manufacturers and consumers.”

Freed of the need to compete with imports, U.S. steelmakers would likely raise their own prices. That, in turn, would force automakers to raise prices of new vehicles, although some might decide to absorb their higher costs.

“Simple supply and demand,” says Lee McMillan, a steel and aluminum analyst at Clarksons Platou Securities. “You eliminate or substantially tax a good portion of supply, and the overall price, the domestic price, rises.”

The American International Automobile Dealers Association said it fears that the tariffs would send car prices up “substantially.” U.S. auto sales plateaued in 2016 at 17.5 million vehicles a year. They fell slightly last year and are expected to dip again in 2018.

“You start throwing in higher prices from more expensive steel for automakers — that’s going to start to pile on multiple factors that could really slow down U.S. car sales,” says Karl Brauer, executive publisher for Kelley Blue Book.

Other industries are concerned as well.

“It’s going to be a big problem,” said James Kaufman, president of Indianapolis Metal Spinning Co., which makes metal components for hubcap and lighting manufacturers. Kaufman said most U.S. aluminum producers don’t make the alloys his company needs. So he has little choice but to import them.

“If the domestic mills are choosing not to make these alloys, I don’t think the users should be penalized for having to bring them in from overseas,” he said.

Kaufman said he also worries that the tariffs would raise the price of the steel that goes into his products, making his company less competitive with foreign rivals.

Do U.S. steel and aluminum producers need help?

Overproduction by China has flooded world markets with steel and aluminum, driving prices down and intensifying pressure on American producers. Nearly half the steel produced in December, for example, came from Chinese mills, according to the World Steel Association. China accounted for more steel production than the United States, Russia, Japan and 28 countries of the European Union combined.

But the U.S. has already thrown up barriers to Chinese imports. As a result, China ranks only 11th in steel and fourth in aluminum imports to the United States. Trump’s tariffs appear far more likely to hurt a staunch American ally, Canada, which is No. 1 in both areas: It supplies 16 percent of steel and 44 percent of aluminum imported to the U.S.

“Any suggestion that Ontario-made steel or aluminum constitutes a ‘national security threat’ to the U.S. is false,” said Kathleen Wynne, premier of Ontario. “Canada and the U.S. are key allies and partners and are integral to each other’s national security.”

How might the rest of the world respond?

Not well. Trade analysts predict that countries hit hard by the steel and aluminum tariffs could complain to the World Trade Organization.

Jean-Claude Juncker, president of the European Commission, denounced the Trump tariffs as “a blatant intervention to protect U.S. domestic industry.”

Chad Bown, senior fellow at the Peterson Institute for International Economics, argues that U.S. has “an extraordinarily weak case” that imports jeopardize national defense. Indeed, the U.S. Defense Department says the military needs just 3 percent of domestic steel and aluminum production.

Still, the WTO is usually wary of making judgments about member countries’ security requirements. So it could balk at second-guessing the White House and could reject complaints against Trump’s tariffs.

Spurned by the WTO, other countries might then retaliate with sanctions, perhaps using national security as a pretext for imposing tariffs of their own.</s>WASHINGTON (AP) - President Donald Trump's vow Thursday to slap tariffs on imported steel and aluminum spooked investors, raised fears that other nations would punch back with their own sanctions and threatened to raise prices for U.S. consumers and companies that use steel and aluminum.

Here's a close look at the tariffs and their potential to trigger a trade war and bruise the U.S. economy:

WHAT EXACTLY DID TRUMP DO?

The president said that sometime next week, he will formally announce tariffs of 25 percent on imported steel and 10 percent on imported aluminum. It's unclear whether any countries would be exempt from what would amount to a heavy new tax on imports. That tax would, in turn, make imported steel and aluminum more expensive for American companies and individuals who use goods containing those materials, ranging from cars to air conditioners to beer cans.

Trump had directed the Commerce Department nearly a year ago to investigate whether imported steel and aluminum posed a threat to national security. The premise is that a healthy industrial base is crucial to the nation's military. The Trump administration has said, for example, that America now has only one smelter that provides the high-purity aluminum that military aircraft require.

Commerce last month issued its conclusion that national security concerns justified sanctions on steel and aluminum imports. Among its recommendations were across-the-board tariffs of 24 percent on steel and 7.7 percent on aluminum. Trump said Thursday that he wants even higher tariffs.

In his decision, Trump deployed a little-used weapon in U.S. trade law: Section 232 of the Trade Expansion Act of 1962, which authorizes the president to restrict imports and impose unlimited tariffs on national security grounds. Since the United States joined the World Trade Organization in 1995, it has pursued only two such investigations. On both occasions - a 1999 case involving oil imports and a 2001 case concerning iron ore and steel imports - the Commerce Department declined to recommend sanctions.

WHAT'S THE LIKELY IMPACT ON COMPANIES AND THE ECONOMY?

American steel and aluminum producers would benefit from a tax on imports and the higher prices that are likely to result.

"You will have protection for the first time in a long while, and you're going to regrow your industries," Trump told U.S. aluminum and steel company executives at the White House.

But there's a flip-side to that calculation: Fewer choices and higher costs for companies that buy steel and aluminum and for their customers.

"Tariffs on steel and aluminum are a tax hike the American people don't need and can't afford," said Utah Republican Orrin Hatch, chairman of the Senate Finance Committee. "I encourage the president to carefully consider all of the implications of raising the cost of steel and aluminum on American manufacturers and consumers."

Freed of the need to compete with imports, U.S. steelmakers would likely raise their own prices. That, in turn, would force automakers to raise prices of new vehicles, although some might decide to absorb their higher costs.

"Simple supply and demand," says Lee McMillan, a steel and aluminum analyst at Clarksons Platou Securities. "You eliminate or substantially tax a good portion of supply, and the overall price, the domestic price, rises."

The American International Automobile Dealers Association said it fears that the tariffs would send car prices up "substantially." U.S. auto sales plateaued in 2016 at 17.5 million vehicles a year. They fell slightly last year and are expected to dip again in 2018.

"You start throwing in higher prices from more expensive steel for automakers - that's going to start to pile on multiple factors that could really slow down U.S. car sales," says Karl Brauer, executive publisher for Kelley Blue Book.

Other industries are concerned as well.

"It's going to be a big problem," said James Kaufman, president of Indianapolis Metal Spinning Co., which makes metal components for hubcap and lighting manufacturers. Kaufman said most U.S. aluminum producers don't make the alloys his company needs. So he has little choice but to import them.

"If the domestic mills are choosing not to make these alloys, I don't think the users should be penalized for having to bring them in from overseas," he said.

Kaufman said he also worries that the tariffs would raise the price of the steel that goes into his products, making his company less competitive with foreign rivals.

Fearful of such higher costs, the prospect of a trade war and a potential blow to corporate profits, investors dumped stocks with abandon on Thursday. The Dow Jones industrial average plunged 420 points, or 1.7 percent.

DO U.S. STEEL AND ALUMINUM PRODUCERS NEED HELP?

Overproduction by China has flooded world markets with steel and aluminum, driving prices down and intensifying pressure on American producers. Nearly half the steel produced in December, for example, came from Chinese mills, according to the World Steel Association. China accounted for more steel production than the United States, Russia, Japan and 28 countries of the European Union combined.

But the U.S. has already thrown up barriers to Chinese imports. As a result, China ranks only 11th in steel and fourth in aluminum imports to the United States. Trump's tariffs appear far more likely to hurt a staunch American ally, Canada, which is No. 1 in both areas: It supplies 16 percent of steel and 44 percent of aluminum imported to the U.S.

"Any suggestion that Ontario-made steel or aluminum constitutes a 'national security threat' to the U.S. is false," said Kathleen Wynne, premier of Ontario. "Canada and the U.S. are key allies and partners and are integral to each other's national security."

HOW MIGHT THE REST OF THE WORLD RESPOND?

Not well. Trade analysts predict that countries hit hard by the steel and aluminum tariffs could complain to the World Trade Organization.

Jean-Claude Juncker, president of the European Commission, denounced the Trump tariffs as "a blatant intervention to protect U.S. domestic industry."

Chad Bown, senior fellow at the Peterson Institute for International Economics, argues that U.S. has "an extraordinarily weak case" that imports jeopardize national defense. Indeed, the U.S. Defense Department says the military needs just 3 percent of domestic steel and aluminum production.

Still, the WTO is usually wary of making judgments about member countries' security requirements. So it could balk at second-guessing the White House and could reject complaints against Trump's tariffs.

Spurned by the WTO, other countries might then retaliate with sanctions, perhaps using national security as a pretext for imposing tariffs of their own.</s>MEXICO CITY (Reuters) - U.S. President Donald Trump’s threats to unleash a trade war over steel crushed hopes of substantial progress in the latest talks to rework NAFTA, heightening fears for the trade deal’s future.

Trump said on Thursday that a plan for protectionist tariffs of 25 percent on steel imports and 10 percent on aluminum goods would be announced next week, following up on Twitter on Friday by calling trade wars“good, and easy to win.”

Trump’s statements have blunted efforts to renegotiate the 1990s-era North American Free Trade Agreement, which had already been disrupted by the early departure of a U.S. official handling one of the most divisive subjects, content rules for autos.

Asked how NAFTA negotiators could be working in good faith to update the deal while Trump talked approvingly about trade wars, a well-placed Canadian source replied:“That’s a very good question. I don’t think there’s an answer yet.”

Jerry Dias, head of Canadian private-sector union Unifor, said after meeting with Canada’s chief negotiator on Friday that Trump’s latest gambit to push his“America First” strategy immediately soured the negotiations.

“The Canadian team is absolutely furious,” Dias told Reuters, saying Canada should walk away from the talks if it did not receive an exemption. He likened the Trump administration to a schoolyard bully.

“Ultimately Canada’s going to have to start fighting fire with fire,” he told reporters.

One Mexican official familiar with the process gave a terse appraisal of how Trump’s announcement went down at the talks.

“Very bad news, very bad timing, very dangerous to go down this road,” the official said.

Trade officials have become used to tensions sparked by Trump, and Mexico’s chief NAFTA negotiator Kenneth Smith said the talks had not been affected by the steel announcement.

However, he said Mexico and Canada should be exempted from the measures as NAFTA allies of the United States.

It remains unclear whether the metals tariffs would apply to the United States’ partners under NAFTA, which together account for more than $1 trillion worth of annual trilateral trade.

Canada, the biggest foreign supplier of steel and aluminum to the United States, is looking at ways to impose immediate sanctions on the United States if necessary, said the Canadian source.

Mexican officials said the government would likely wait for clarity on the matter before responding, but one said earlier this week that Mexico would hit back if subject to U.S. tariffs.

Officials say a handful of less contentious NAFTA chapters could still be concluded during the latest round of talks, and three people at the talks said the technical teams remained focused on their tasks, despite the uncertainty the steel tariff plan had caused.

Negotiators from the three countries have been meeting for six months and made few concrete announcements.

Expectations of progress at the seventh round in Mexico City had already been tempered by the conviction that major problem areas were unlikely to be removed without the mediation of senior political figures.

The risk of a tariff war between the NAFTA partners threw up new roadblocks.

Mexican steel industry association Canacero said it expected the government to take“immediate reciprocal actions” if the United States slapped the tariffs on Mexico, and agricultural lobbyists at the NAFTA talks also condemned the tariff plan.

Trump has repeatedly threatened to pull out of NAFTA if the deal is not recast to his liking, arguing that it has caused an exodus of U.S. manufacturing jobs to lower-cost Mexico.

Blindsided by Trump’s steel announcement, participants at the talks are looking ahead to Monday’s scheduled meeting between U.S. Trade Representative Robert Lighthizer, Canada’s Foreign Minister Chrystia Freeland and Mexico’s Economy Minister Ildefonso Guajardo for clarity on the path forward.

“It’s not a question of what’s achievable. Of course it’s achievable,” said one industry executive in Mexico close to the negotiations.“It’s a question of political will.”</s>* No decision on steel, aluminum tariffs as Trump meets industry

* Duties would be major hit to China

* Studies show few jobs likely to be created

WASHINGTON, March 1 (Reuters) - U.S. President Donald Trump is holding a“listening session” with steel and aluminum executives on Thursday but he will not announce a final decision on whether to impose tariffs on imports of the products, officials in the White House said.

Trump has until April 11 to decide on applying hefty tariffs or quotas to steel imports in a move that would increase tensions with China, whose top trade official Lui He is in Washington for trade talks.

The administration says duties would protect U.S. industry, but critics say they would raise costs for industry and fail to deliver on a campaign pledge to boost domestic jobs.

Trump tweeted on Thursday that American steel and aluminum companies needed“free, fair and smart trade”. Trump has indicated he favors a duty of 24 percent on steel imports.

Wall Street’s main indexes fell as industrial stocks, including heavyweights Boeing and Caterpillar, took a beating on fears that potential tariffs on steel imports could hit profits.

Trump has a range of options based on a report by the Deparment of Commerce with duties options of at least 24 percent on all steel products from all countries, and at least 7.7 percent on all aluminum products from all countries.

Although China only accounts for two percent of U.S. steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.

China has indicated it could retaliate against U.S. steel tariffs by targeting imports of U.S. agricultural commodities, such as soybeans of which America is the largest supplier.

Trade tensions between the United States and China have risen since Trump took office in 2017 and the administration is also pushing on what it regards as forced technology transfers to China.

Shares of Asian steel producers such as South Korea’s POSCO and Nippon Steel fell overnight, while those of U.S. producers AK Steel, US Steel Corp and Nucor - jumped on prospects of import tariffs.

FEW MORE JOBS FROM TARIFFS

While American steelmakers have lost three quarters of their jobs between 1962 and 2005, a major study by the American Economic Association showed that much of this had been due to improved production technology as output per worker rose fivefold.

“Thus, even if trade protection leads to increased domestic production, increases in employment may be far less than many hope,” a report from the highly-regarded independent Econofact economist network said last week.

Consumers of steel and aluminum have lobbied hard against the tariffs. Econofact said in its report that two million jobs were in industries that use steel“intensively”, including auto parts, household appliances, farm machinery and oil equipment.

Jobs in the consuming industries are concentrated in California, Texas, the Northeastern and Midwestern states that comprise the rust belt and states in the Southeast.

“Across many states, the number of jobs adversely affected in these steel-using industries could far exceed any steel jobs saved,” Econofact warned.

“Past experience also shows that unilateral action like Section 232 tariffs will invite retaliation — the Bush-era steel tariffs led many countries to target politically sensitive U.S. exports like Florida oranges and North Carolina textiles.” (Reporting by Susan Heavey, David Shepardson, Steve Holland, Lesley Wroughton and Eric Walsh Writing by David Chance Editing by Chizu Nomiyama and Alistair Bell)</s>Asian shares post steep declines, adding to global stock market losses after President Donald Trump's vow to impose stiff steel and aluminum tariffs sparks fears of a trade war.

Asian shares post steep declines, adding to global stock market losses after President Donald Trump's vow to impose stiff steel and aluminum tariffs sparks fears of a trade war.

(AP Photo/Koji Sasahara). People walk by an electronic stock board of a securities firm in Tokyo, Friday, March 2, 2018. Asian shares posted steep declines Friday, adding to global stock market losses after President Donald Trump vowed to impose stiff ...

(AP Photo/Koji Sasahara). People walk by an electronic stock board of a securities firm in Tokyo, Friday, March 2, 2018. Asian shares posted steep declines Friday, adding to global stock market losses after President Donald Trump vowed to impose stiff ...

China has expressed 'grave concern' about a U.S. trade policy report that pledges to pressure Beijing but had no immediate response to President Donald Trump's plan to hike tariffs on steel and aluminum.

China has expressed 'grave concern' about a U.S. trade policy report that pledges to pressure Beijing but had no immediate response to President Donald Trump's plan to hike tariffs on steel and aluminum.

Chinese leaders need to decide whether President Donald Trump's hike in steel and aluminum tariffs justifies starting a fight that might disrupt access to one of their biggest markets.

Chinese leaders need to decide whether President Donald Trump's hike in steel and aluminum tariffs justifies starting a fight that might disrupt access to one of their biggest markets.

(Chinatopix Via AP, File). In this Aug. 1, 2016 photo, laborers work in the steel market in Yichang in central China's Hubei province. China has expressed “grave concern” about a U.S. trade policy report that pledges to pressure Beijing but had no imme...

(Chinatopix Via AP, File). In this Aug. 1, 2016 photo, laborers work in the steel market in Yichang in central China's Hubei province. China has expressed “grave concern” about a U.S. trade policy report that pledges to pressure Beijing but had no imme...

President Donald Trump says he'll impose tariffs on steel and aluminum imports in response to what he calls decades of unfair trade policies.

President Donald Trump says he'll impose tariffs on steel and aluminum imports in response to what he calls decades of unfair trade policies.

(AP Photo/Evan Vucci). President Donald Trump speaks during a meeting with steel and aluminum executives in the Cabinet Room of the White House, Thursday, March 1, 2018, in Washington. From left, Roger Newport of AK Steel, John Ferriola of Nucor, Trump...

(AP Photo/Evan Vucci). President Donald Trump speaks during a meeting with steel and aluminum executives in the Cabinet Room of the White House, Thursday, March 1, 2018, in Washington. From left, Roger Newport of AK Steel, John Ferriola of Nucor, Trump...

(AP Photo/Frank Augstein, File). FILE - In a Sept. 22, 2005 file photo a steel worker measures steel coils of ThyssenKrupp steel company in Duisburg, western Germany. Ordering combative action on foreign trade, President Donald Trump has declared that ...

(AP Photo/Frank Austin, file). FILE - In this Sept. 22, 2005 file photo a steel worker takes a sample at the blast furnace of ThyssenKrupp steel company in Duisburg, western Germany. Ordering combative action on foreign trade, President Donald Trump ha...

BERLIN (AP) - U.S. President Donald Trump risks sparking a trade war with his closest allies if he goes ahead with plans to impose steep tariffs on steel and aluminum imports, German officials and industry groups warned Friday.

Trump, who has long railed against what he deems unfair trade practices by China and others, said Thursday he planned to levy penalties of 25 percent on imported steel and 10 percent on aluminum imports from next week.

The president shrugged off worries of a trade war in an early Friday morning tweet, saying "when a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win."

Chancellor Angela Merkel's spokesman Steffen Seibert said the tariffs would hurt international commerce and that the U.S. would not solve issues of global overcapacity of both steel and aluminum with "unilateral measures."

A short time later, following Trump's tweet, Seibert that Germany's "position hasn't changed in the last 18 minutes."

Trump's announcement Thursday has hit markets hard, and global indexes tracked Wall Street lower on Friday - Germany's DAX index, for example, was down 2 percent in midday trading in Frankfurt amid trade war fears.

"Markets are clearly concerned that Trump's move to impose tariffs will spark retaliation from other countries or trade blocs, which could be the start of a trade war," said Bas van Geffen, an analyst at Rabobank.

German producers would clearly be impacted by any U.S. tariffs, as they account for about 4 percent of U.S. steel imports. Foreign Minister Sigmar Gabriel said the announcement raised "serious concerns" and that a blanket duty would punish everyone.

"Unlike possibly other countries, there's no unfair competition or dumping prices from German or European firms," he said.

He urged Trump to reconsider, suggesting that a trade war between allies would harm both sides.

"The threat of difficult trade strife between the U.S. and Europe is neither in the interest of Europe or the U.S. As the saying goes: 'when two fight with each other, it pleases the third,'" he said without naming any specific countries.

Overall, the 28 EU nations make up nearly 21 percent of U.S. steel imports, according to the German Steel Federation, and Gabriel said the tariffs could "endanger thousands of jobs in Europe."

Hans Juergen Kerkhoff, president of the German Steel Federation, said the tariffs would violate World Trade Organization rules and urged the EU to take action.

Only about five percent of German steel exports go to the U.S., but he warned there could be a knock-on effect contributing to "a rise of protectionism worldwide."

Increased foreign production, especially by China, has driven down prices and hurt U.S. producers, creating a situation the U.S. Commerce Department has called a national security threat.

WTO spokesman Dan Pruzin told reporters in Geneva that the agency has never had to deal with a case challenging any member's right to invoke the organization's exception allowing tariffs in cases of national security.

"If any of our members have any concerns about any actions adopted by another member, they can raise this in the WTO," he said, refusing to comment directly on Trump's plans.

Economy Minister Brigitte Zypries warned that the EU would "answer accordingly" if the U.S. went ahead with its plans.

"Someone who talks as much about fair trade as President Trump should not resort to such unfair measures," she said.

Seibert, Merkel's spokesman, said EU authorities were in contact with their counterparts in Washington and had made clear their concerns about the proposed tariffs, and what their "necessary reaction" would be.

"The German government will look very closely at this decision and then assess the impact on the German and European economies," he said.

Dieter Kempf, head of the Federation of German Industries, urged all sides to "keep a cool head in order not to unnecessarily fuel an escalating trade conflict on a global scale."

"There's too much at stake," he said. "Nobody is an island, the global economy is closely networked and a new wave of protectionism would quickly hit Germany as a trading nation."

Frank Jordans in Berlin and Jamey Keaten in Geneva contributed to this report.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.</s>Steel and aluminium producers across Asia sank Friday on news of Donald Trump's controversial tariffs, though some analysts said the long-term effects on the sector might not be as bad as thought.

The president said Thursday he would slap levies of 25 percent on steel and 10 percent on aluminum imports, delivering an election campaign promise to put "America First" and protect US jobs from what he claims are unfair trade practices.

The announcement has been met with fury across the world -- even from those in his own Republican Party -- with warnings it could spark a painful global trade war, sparking a sell-off on equity markets already on edge over fears of rising US interest rates.

Leading the selling Friday were firms that produce or use steel and aluminium.

In Seoul, South Korea's largest steelmaker POSCO tumbled 4.5 percent in early trade, while Hyundai Steel slumped 2.8 percent.

Tokyo-listed Nippon Steel and Sumitomo Metal dived more than four percent, and its smaller rival JFE Holdings was down 3.3 percent, with Rio Tinto in Sydney off 1.8 percent.

Japanese car giant Toyota fell 2.6 percent as it warned the car sector would be hurt and the measures would "substantially" increase the price of cars sold in America. Nissan fell 1.5 percent and Honda shed 3.8 percent.

"Traders are selling pinpointed steelmakers and automakers today in the wake of the remarks by Trump, at a time when sentiment has been hit by worries over US interest rates," Hikaru Sato, senior technical analyst at the investment strategy section at Daiwa Securities in Japan, told AFP.

And in Shanghai, Aluminium Corporation of China (Chalco) shed more than one percent while Baoshan Iron and Steel dropped 3.4 percent.

However, Sydney-listed Bluescope Steel, which exports steel to the United States and also has operations in America, was up more than 1.06 percent. The firm has sought to be exempted from the tariffs and says its steel mill in Ohio state could benefit from the import crackdown.

Analysts said that while there were initial sharp losses in the sector following the announcement, the main fear was what it could mean in the future.

"We think overall, the danger is contagion -- the reaction -- rather than the actual tariffs themselves," Fat Prophets resources analyst David Lennox told AFP.

"We don't know the details yet and it'll be the reaction of the countries where the tariff will be applied. Where or how will those countries retaliate? Because it will happen and that's what people worry about.

"If the countries all stand back and take it on the chin, then that's the end of it. Poor old US will get dearer steel and it'll cost them more to build things."

And IBK Investment Securities analyst Han Yu-gun added: "This move will hurt US business firms more than South Koreans."
U.S. President Donald Trump announces plans to impose tariffs on steel and aluminium imports.