WASHINGTON (AP) – President Donald Trump on Friday insisted "trade wars are good, and easy to win," a bold claim that prompted threats of retaliation against U.S. exports like blue jeans and motorcycles.
"Make no mistake: If the president goes through with this, it will kill American jobs – that's what every trade war ultimately does," said Sen. Ben Sasse, a Nebraska Republican.
Trump has declared that the U.S. will impose punishing tariffs on steel and aluminum imports. The move will likely raise steel and aluminum prices here. That's good for U.S. manufacturers. But it's bad for companies that use the metals, and it prompted red flags from industries ranging from tool and dye makers to beer distributors to manufacturers of air conditioners. The American International Automobile Dealers Association warned it would drive prices up "substantially."
Markets tumbled in Asia, where China had already expressed a "grave concern" about U.S. trade policy. And the European Union promised retaliation against American exports if Trump follows through. In the United States, the S&P 500 dropped as much as 1.1 percent before paring its decline.
"None of this is reasonable, but reason is a sentiment that's very unevenly distributed in the world," said Jean-Claude Juncker, president of the EU's executive body.
Asked if a trade war is brewing, he said: "I can't see how this isn't part of war-like behavior."
Early Friday, Trump took to Twitter to defend himself: "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. Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big. It's easy!"
He later tweeted: "Our steel industry is in bad shape. IF YOU DON'T HAVE STEEL, YOU DON'T HAVE A COUNTRY!"
Sen. Sasse echoed a sentiment of many U.S. lawmakers when he issued a statement in response: "Kooky 18th century protectionism will jack up prices on American families."
Trump's announcement came only after an intense internal White House debate. It brought harsh criticism from some Republicans and roiled financial markets with concerns about economic ramifications.
Trump has long railed against what he deems unfair trade practices by China and others. This week, he summoned steel and aluminum executives to the White House and declared he would levy penalties of 25 percent on imported steel and 10 percent on aluminum imports. The tariffs, he said, would remain for "a long period of time," but it was not immediately clear if certain trading partners would be exempt.
"This is going to have fallout on our downstream suppliers, particularly in the automotive, machinery and aircraft sectors," said Wendy Cutler, a former U.S. trade official who is now vice president of the Asia Society Policy Institute. "What benefits one industry can hurt another. What saves one job can jeopardize another."
Steel-consuming companies said steel tariffs imposed in 2002 by President George W. Bush ended up wiping out 200,000 U.S. jobs.
The decision had been strenuously debated within the White House, with top officials such as economic adviser Gary Cohn and Defense Secretary Jim Mattis raising concerns.
The penalties were pushed by Commerce Secretary Wilbur Ross and White House trade adviser Peter Navarro, an economist who has favored taking aggressive action.