BERLIN – A day after President Donald Trump took a swing at U.S. trading partners by threatening stiff and sweeping tariffs on steel and aluminum, they hit back. They promised to retaliate against quintessential U.S. goods like Kentucky bourbon, blue jeans and Harley-Davidson motorcycles.
That is likely to turn into a wave of protest aimed at U.S. products as other countries, including traditional allies, respond to Trump's plan to clamp down on imports of metals from overseas.
Canada, China and the European Union have said they would respond with tariffs of their own that could lead to billions of dollars in U.S. export losses. Those levies would harm the farmers and business interests the Trump administration has promised to protect and would fuel a trade fight that could undermine the president's goal of strengthening American industry.
Trump thumbed his nose at the concerns, tweeting, "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."
Li Xinchuang, vice chairman of the China Iron and Steel Association, called the president's move "stupid," saying, "Trump's decision does no good to everyone except a few American steel enterprises."
And John Weekes, Canada's negotiator for the North American Free Trade Agreement in the early 1990s, said the president's "notion is going down very badly in Canada."
"It certainly will have a negative effect on our bilateral relationship," he said.
U.S. businesses are more tied to the global economy than ever before, and the Trump administration is seeking concessions from trading partners to put U.S. companies on a more competitive footing. Negotiators from Canada, Mexico and the United States were meeting in Mexico City to hash out changes to NAFTA, and Washington is trying to revise a trade deal with South Korea. The possibility of tariffs complicates both efforts.
Trump appeared unmoved by the blowback, posting a series of Twitter messages Friday defending his proposal to impose tariffs of 25 percent on steel and 10 percent on aluminum.
"We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON'T HAVE STEEL, YOU DON'T HAVE A COUNTRY!" Trump tweeted.
The European Union detailed a three-step plan to penalize $3.5 billion of U.S. trade — the same amount of European steel and aluminum the bloc estimates would be harmed by the planned tariffs. It proposed taxing U.S. exports including bourbon, blue jeans, orange juice, cranberries, rice and motorcycles. The European Union could then take action to protect its own metal makers from a surge in imports and bring a case against the U.S. at the World Trade Organization.
A European Union official said that the bloc had been preparing for the announcement for months and that everything was in place for a swift, proportionate response.
The measures were intended to put pressure on politically sensitive areas, trade analysts said. Harley-Davidson motorcycles are made in the home district of House Speaker Paul Ryan, R-Wis. Orange juice comes from the swing state of Florida. Restrictions on Kentucky bourbon could add pressure on the Senate majority leader, Mitch McConnell, who is from the state.
Retaliation could hit hardest in many of the rural communities that were strongholds for Trump. Farmers are among America's largest exporters and often become a target in trade spats, said Darci Vetter, a former chief agricultural negotiator for the U.S. trade representative. She said the agricultural community was "rightly nervous" about the prospect.
Canada and Mexico were America's No. 1 and No. 3 largest agricultural markets in 2016, and South Korea is a major market for beef, corn, pork and fresh fruit, Vetter said. The United States exports cotton to Turkey and wheat and dairy to Brazil, other major suppliers of steel.
Sen. John Cornyn of Texas expressed concern Friday that America's trading partners might respond by imposing tariffs on agriculture, which he said would "devastate our agricultural communities."
Other countries have been less specific, but no less emphatic, in their threats. Canada's minister of foreign affairs, Chrystia Freeland, said Canada stood ready to defend its trade interests, while the Australian trade minister, Steven Ciobo, said the tariffs would set off retaliatory measures that would hurt everyone.
U.S. steel companies are a key constituency for Trump, who won the support of some blue-collar workers by pledging to revive industry. The steel industry has shed hundreds of thousands of jobs in the country in the past two decades, partly because of automation and partly because of a flood of production from China, which has driven down global prices to a level where some U.S. mills cannot compete.
Antonio Ortiz-Mena, a senior adviser at Albright Stonebridge Group, said that if the United States was willing to impose penalties like these on its close trading partners, other countries would be less eager to negotiate trade deals with the U.S. "What is the benefit of having a special relationship?" he asked. "I think there could be a lot of unintended and unforeseen consequences."