US steel, aluminum tariffs to likely hurt economies: IMF

The IMF has warned that President Donald Trump's decision to impose hefty tariffs on imported steel and aluminium is likely to cause damage to the US and its trading partners, urging all countries to "constructively" resolve trade disagreements.

Trump on Thursday said that he would impose a 25 per cent import tariff on steel and 10 per cent on aluminium to protect US producers.

The import restrictions announced by the US president are likely to cause damage not only outside the US, but also to the US economy itself, including to its manufacturing and construction sectors, which are major users of aluminium and steel, International Monetary Fund spokesman Gerry Rice said, a day after Trump made the announcement.
 

IMF, he said, is concerned that the measures proposed by the US will, de facto, expand the circumstances where countries use the national-security rationale to justify broad-based import restrictions.

We encourage the US and its trading partners to work constructively together to reduce trade barriers and to resolve trade disagreements without resort to such emergency measures, Rice said.

The tariffs -- 25 per cent on steel and 10 percent on aluminium -- cover two materials that are the lifeline of the construction and manufacturing sectors in the US.

The announcement angered key US allies -- Canada, the EU, Australia and Mexico.

European Commission chief Jean-Claude Juncker vowed the bloc "will react firmly" to defend its interests.

Canada and Germany both termed the tariffs "unacceptable".

Trump has defended his decision, saying "trade wars are good".

He tweeted that the US was "losing billions of dollars on trade" and would find a trade war "easy to win".

In a tweet early on Friday, Trump said the US would "win big" in a trade war.

He later followed this up with further tweets, saying the US must "protect our country and our workers" and that the trade deficit left him with no choice on tariffs.