US president Donald Trump has signed a new executive order directing a review of steel imports, most of which come from China, sparking fears that the world's largest economy could be embracing protectionism. The review could lead to the imposition of tariffs on steel imports and threaten escalating trade tensions.
The move comes as a key gathering of central bankers and finance ministers takes place at the International Monetary Fund and World Bank annual meetings. The meetings are taking place under the shadow of a range of economic challenges, not least the threats by the Trump administration to reject the free-trade economic model that has underpinned the global order for decades. Minister for Finance Michael Noonan arrived in Washington on Thursday and will lead the Irish delegation.
In a sign of the potential challenges ahead for multilateral institutions such as the World Bank and IMF, as the first full day of the meeting got under way, two blocks away in the White House Mr Trump signed an executive order announcing a review of whether steel imports into the US could be restricted for national security reasons under a 1962 law.
‘Historic day’
At a ceremony in the White House, surrounded by steel executives, Mr Trump said it was a “historic day for American steel”. He added that his administration would “fight for American workers and American-made steel”.
The move is the latest effort by the US president to prioritise American jobs and manufacturing in keeping with the "America first" policy that propelled him to victory in last November's election. Earlier this week he signed a "buy America, hire American" order during a factory visit in Wisconsin which included a review of the H-1B visa scheme used by foreign tech workers.
The new executive order on steel risks inflaming tensions with China, just weeks after Mr Trump successfully pressed China for more support in tackling the nuclear threat from North Korea. Though Mr Trump said at the signing ceremony the order had "nothing to do with China", commerce secretary Wilbur Ross said the decision to initiate the review had been taken in part because Chinese steel exports now represent 26 per cent of the US market.
Common ground
In her opening press conference at the IMF, managing director Christine Lagarde directly addressed the challenges to globalisation posed by the new US administration, suggesting the IMF could find common ground with the new US administration.
“From the various contacts that I’ve had with the administration so far, I have every reason to believe that we will make progress, that we will co-operate all together in order to support and indeed improve the system as we have it,” she said.
While she warned against “protectionist measures” and emphasised the benefits of free trade, she also suggested that there was room for change at the World Trade Organisation. Highlighting the growing number of cases taken against the Geneva-based organisation, she said: “There is clearly an issue that needs to be addressed.”
Separately, at a speech at the Peterson Institute for International Economics in Washington, EU commissioner and former French finance minister Pierre Moscovici warned that European voters were also feeling "vulnerable" in the face of globalisation, highlighting the current wave of populism that is evident in the French election campaign.
Earlier, the governor of the Bank of England, Mark Carney, warned that Brexit was one of a number of factors that could undermine "strong, sustainable and balanced growth" in the western economy. He said the decision by Britain to leave the European Union could damage trust, disrupt capital flows in the G20 economies and restrict trade leading to "fewer jobs, lower growth and higher domestic risks".
