• 2 days ago
Alan Winters, Professor Emeritus and former Director of the Centre for Inclusive Trade Policy, University of Sussex spoke to CGTN Europe about Trump’s tariffs on steel and aluminum imports.

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00:00Alan Winters, Professor Emeritus of Economics at the University of Sussex and former Director of the Development Research Group at the World Bank.
00:08Great to see you. Now, look, trade wars are good and easy to win. That was what Trump said the last time he imposed levies on steel in 2018.
00:18What do you think makes this raft of measures different?
00:23I think it's different this time because it's broader and it's quicker and it's, in a sense, less temperate.
00:31One really cannot predict where it's all going to end.
00:36But having said that, you know, the terrorists are pretty much like the terrorists last time.
00:41And we have to see whether the sort of agreements that we reached last time on steel and aluminium can be resuscitated.
00:49Canada and Mexico were eventually, fairly shortly afterwards, exempted.
00:53Europe, the UK negotiated exemption from the tariffs on condition that they didn't export too much to the US.
01:01So you've mentioned there some of the countries, the places that might be hard hit.
01:05But in terms of sectors, which ones is it going to bite? Is it going to push up prices in the car industry, for example?
01:12Almost certainly. I mean, how much prices get pushed up obviously depend on how much steel and aluminium you use.
01:23But the car sector is a very large user, but so are plenty of other bits of construction and mechanical engineering.
01:32The steel sector is such that the people who are supplying steel and aluminium to the US are probably not able to absorb much of this hit into their margins.
01:44And so, frankly, either the things will dry up, so there will be a shortage and prices will go up, or they'll raise their prices correspondingly.
01:53Alan, as the US turns inward, do you think this perhaps gives China an opportunity to focus on being a stable and reliable trading partner of the Global South and newer markets?
02:04Oh yes, I think that must be something that's very prominent in the Chinese government's planning.
02:13I think with trade, in a sense, it's all too new and so difficult to unpick exactly where it's going.
02:21But somewhere where very clearly there is a vacuum being created is in foreign aid.
02:28Mr. Musk, I guess we should say, has stopped virtually all US foreign aid.
02:34That's a very large amount. It's very important to the Global South countries that receive it.
02:40And without a doubt, other countries are asking, can they step into their own advantage?
02:46China will be the main one of those. China has got some money and is likely to be cultivating friends.
02:54Look, Trump tends to blindside the markets with these big announcements, and then we get the details later.
03:00But what impact do you think all of this is going to have on international trade and on supply chains?
03:06I think on steel and aluminium, the impact will be material but not massive and not totally destructive of the system.
03:16Steel, particularly, has been subject to trade interventions ever since I've been in the industry for 50 years.
03:24So I don't think that's sort of existential.
03:28What I think is existential is this notion that he's going to have a reciprocal trade policy.
03:35You choose the tariff and then that's what we'll charge you.
03:38That's contrary to just about every sort of rule of the international trading system that's done us so well over the last 60, 70 years.
03:48It's also actually completely bonkers if one really thinks about it.
03:54Countries put import tariffs onto the things they import, not on the things that they export.
04:00So what you're going to find is trading partners are reducing their tariffs on the stuff that they export
04:06and challenging Trump to reduce the US tariffs on them.
04:11So I think it's actually a lot of bluff and bluster.
04:15But what the collateral damage will be as we go along, it's very difficult to predict.
04:20Alan Winters at the University of Sussex, thank you very much.

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