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US tariffs risk 'worrying precedent' of using national security to justify protectionism, warns Liam Fox

America’s use of national security concerns as grounds for introducing import tariffs on steel and aluminium risks creating a “worrying global precedent”, International Trade Minister Liam Fox has warned.
Mr Fox sounded the alarm as he addressed Parliament about how the Government is reacting to President Donald Trump’s decision to slap 25pc levies on steel brought into the US and 10pc tariffs on aluminium.
Britain is “deeply disappointed” by the move, he said, describing it as “unjustified on the grounds of national security”.
“The UK and US should have a strong defence and security relationship as close allies in NATO, permanent members of UN security council and as nuclear powers,” Mr Fox said. “Close co-operation between UK and US is vital to international peace and security.”
Last week Mr Trump said he was introducing the tariffs under US legislation called Section 232. This examines whether imports put US national security at risk because they are driving domestic producers out of business, making the country reliant on foreign suppliers.
US tariffs risk 'worrying precedent' of using national security to justify protectionism, warns Liam Fox

International Trade Secretary Liam Fox said the US tariffs on steel had 'weak foundations' in law 

Credit:
AFP
Blocking imports of foreign steel fulfilled the President's "America first" campaign pledge and his promise to protect US industry. 
However, Mr Fox said President Trump’s decision had “weak foundations under international law and is not consistent with US Department of Defence’s own judgment in an investigation conducted into national security”.
His statement to Parliament came as Prime Minister Theresa told Mr Trump the tariffs were "unjustified and deeply disappointing" during a 30-minute phone call, which officials later described as "constructive".
Britain exports about 350,000 tonnes or about 7pc of total production of steel to the US each year, worth about ?350m to British companies. However, this represents only 1pc of America’s total steel imports. British aluminium accounts for only 0.1pc of US imports.
The levies will make steel imported into the US more expensive, with producers having to either swallow the increased costs or risk losing American orders.
US tariffs risk 'worrying precedent' of using national security to justify protectionism, warns Liam Fox

Prime Minister Theresa May has spoken directly with Donald Trump about Britain being offered exemptions from the tariffs

Credit:
AP
As well as potentially harming steelmakers with the financial hit caused by the levies, the tariffs also pose an indirect danger to the UK steel industry, which is only just recovering from a crisis three years agos..
America closing itself off to foreign steel means that millions of tons that would have previously gone there will now be redirected to other markets, potentially flooding the UK with cheap steel.
Mr Fox said Britain is working with the EU to introduce “safeguard measures”, which could stem the flow of this redirected output.
Measures to block excess foreign steel coming into EU member states could be in place as “early as mid-July”, he added.
He also said the Government would be working with individual British steel companies supplying American customers to secure product exemptions from the tariffs.
US tariffs risk 'worrying precedent' of using national security to justify protectionism, warns Liam Fox

Steel has become a battleground for international trade

Credit:
AP
These could be offered on items which US companies cannot source domestically, forcing them to go abroad.
Gareth Stace, director of trade body UK Steel, called the US tariffs “absurd” and welcomed moves to stop steel being dumped in the EU.
“We must ensure we are not now overwhelmed with boats lining up to offload steel at British ports,” he said. “We have already seen EU steel imports increase by 8.4pc in the first quarter so there is no time to lose. Robust safeguard measures must be introduced now to maintain market stability and a fair and level playing field for EU steel producers.”
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