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Asia's biggest exporters bristle over U.S. tariffs, fanning trade war fears

Reuters  |  TOKYO 

By Aaron Sheldrick

(Reuters) - Major Asian nations reacted sharply on Friday to U.S. Donald Trump's decision to impose tariffs on and aluminium imports, warning of damage to relations amid industry calls for retaliation.

said the move would have a "big impact" on the countries' close bilateral ties, while said it was "resolutely opposed" to the decision and said it may file a complaint to the

Trump on Thursday pressed ahead with the imposition of 25 percent tariffs on imports and 10 percent for aluminium on Thursday, though he announced exemptions for and Mexico, and said exceptions could also be made for other allies.

China, which produces half the world's steel, will assess any damage caused by the U.S. move and "firmly defend its legitimate rights and interests," the country's said.

The tariffs would "seriously impact the normal order of international trade," the ministry said.

The European Union, and said overnight they should not be targeted or would seek exemptions, and both and said they would ask to be made exceptions also.

South Korea, a key ally, is the third largest exporter to the United States, after and

The U.S. is the world's biggest importer of steel, purchasing 35 million tonnes of raw material in 2017. Of those imports, South Korea, Japan, and accounted for 6.6 million tonnes.

"We should prevent a trade war situation from excessive protectionism, in which the entire world harm each other," told a meeting with steelmakers.

Trade tensions between and have risen since Trump took office. accounts for only a small fraction of imports, but its massive industrial expansion has helped create a global glut of that has driven down prices.

China's and metals associations urged the government to retaliate against the United States, citing imports ranging from to coal, and

It was the most explicit threat yet from the country in an escalating trade spat.

The dispute has fuelled concerns that soybeans, the United States' most valuable export to the world's second largest economy, might be caught up in the trade actions after launched a probe into imports of U.S. sorghum, a grain used in animal feed and liquor.

"The cost of a trade war will be tremendous and it will make everyone unhappy," Junichi Makino, chief at in Tokyo, said in a report on Friday.


Trump's declaration coincided with the signing by 11 countries of a new Trans-Pacific trade pact that the withdrew from last year.

The announcement underlines concerns about rising U.S. and the latest tariffs offset the positive impact from plans also announced overnight for Trump to meet with North Korea's that raised hopes of ending a standoff over North Korea's nuclear weapons programme, said Kwon Young-sun, an at

While carrying a message to Washington to push forward a diplomatic breakthrough over North Korea, South Korea's requested U.S. officials to support South Korea's request for a waiver on the tariffs, a South Korean said.

Trump in January ordered tariffs on solar panels and washing machines imports to the

Exports of these products and and aluminium make up less than 1 percent of South Korea's total exports, Young-sun said.

"But broader U.S. curbs and countermeasures from or could derail the exports environment going forward," he said.

A senior South Korean said the tariffs would impact the renegotiation of the bilateral deal with the that is currently underway.

The said ways had to be found to address overcapacity in as was the top importer of Chinese steel, although shipments from were 21 percent down in 2017 from the previous year.

He said the has raised concerns over South Korea's "transshipment" of Chinese steel, although the trade ministry has argued that only 2.4 percent of exported to the U.S. uses Chinese material.

The also expect higher U.S. tariffs to put South Korean carmakers, and Kia Motors, at a disadvantage in the U.S. market as it would increase their costs.

In Sydney, sounded confident of getting favourable treatment as Trump spoke of Washington's strong relationship with Australia, a major exporter of ore but exports little and the was not a major customer.

"I was pleased to see the acknowledge the strong points I have been making to him. There is no case for imposing tariffs on Australian steel," Turnbull told reporters in

India's ministry said in a note to the trade ministry last month that U.S. import tariffs were expected to lead to a loss of $130 million in exports which were expected to total 333,656 tonnes for the year ending on March 31.

will host her U.S. and Japanese counterparts in on Saturday to discuss overcapacity as part of talks that begin in December at a meeting in

Shares in China's and aluminium makers fell on Friday morning. Baoshan & was down 3.3 percent by 0616 GMT, while and Shougang were down more than 1 percent.

In South Korea, shares in were down 3.5 percent, while in Japan's biggest steelmaker & Sumitomo Metal fell 0.7 percent by the close.

Chinese futures slumped to their weakest level since November.

(Reporting by Jourdan and in SHANGHAI, Yuka Obayashi, Kaori Kaneko and Ami Miyazaki in TOKYO, Ju-Min Park, Hyunjoo Jin and Cynthia Kim in SEOUL; writing by Aaron Sheldrick; editing by Simon Cameron-Moore)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, March 09 2018. 14:36 IST