US decision to impose tariffs on steel and aluminium imports could raise prices for consumers and potentially put people out of work, businesses say.
Trading partners of the US and industries warned on Friday that the Trump administration's decision to impose tariffs on aluminum and steel imports could backfire, provoking a trade war without resolving the problems they're intended to address.
Businesses say the 25 percent tariff on imported steel and 10 percent levy on aluminum will jack up costs, raising prices for consumers and potentially putting people out of work.
President Donald Trump said the tariffs, due to take effect in 15 days, are needed to protect US workers.
China, Japan and EU federation react
China's Commerce Ministry said it "firmly opposes" the move but gave no indication if Beijing might make good on threats to retaliate.
"These measures could make a significant impact on the economic and co-operative relationship between Japan and the US, who are allies," Taro Kono, Japan's foreign minister, said in a statement.
The head of EUROFER, Europe's main steel federation, said Trump's reasons for slapping tariffs on steel and aluminum were an absurdity and that the move could cost tens of thousands of jobs across the continent.
In both Asia and Europe steel producers worry over the loss of market access and also that steel from other exporting nations will flood in.
EUROFER chief Axel Eggert said "the loss of exports to the US, combined with an expected massive import surge in the EU could cost tens of thousands of jobs in the EU steel industry and related sectors."
Trump has complained over low-cost Chinese exports of steel and aluminum, but the latest move was likely to hit Japan and South Korea harder.
The US bought just 1.1 percent of China's steel exports last year compared with 12 percent for South Korea and five percent for Japan, according to the US International Trade Commission.
"Significant damage in South Korea's steel exports to the United States seems unavoidable," South Korean trade minister Paik Un-gyu said in a statement.
A large share of Japanese and Chinese steel goes to Southeast Asia, where booming construction and light industries are fueling strong demand for steel and the region is dependent on imports to meet its needs.
The US tariffs could push producers to sell still more to Southeast Asia, depressing steel prices. That would hurt producers but boost profits of construction and other industries in Southeast Asia.
US jobs at stake
Back in the US, Gary Shapiro, president and CEO of the Consumer Technology Association, which represents more than 2,200 companies, said the tariffs could cost far more American jobs than they would create.
US automakers are among the businesses with the most at stake, accounting for 38 percent of the aluminum and 15 percent of the steel consumed in the country, according to Ward's Automotive Reports.
The Alliance of Automobile Manufacturers, a major industry trade group, warned the tariffs will also drive up the price of steel made in the US.
If the entire cost were passed to consumers, which may not be possible, it could add about $300 to the price of the average vehicle, said Kristen Dziczek, director of Center for Automotive Research's Industry, Labor & Economics Group.
The tariffs will affect a wide range of products, from high-tech gadgets to beer.
The Beer Institute, a trade group representing the world's largest brewers, estimates the 10 percent tariff on the aluminum encasing in the US will push costs up by $348 million annually, threatening more than 20,000 jobs in the industry.
The head of the National Retail Federation, whose members include department store chains, grocery stores and other merchants around the world, also raised objections to the tariffs Thursday, calling them a tax on all Americans.
"A tariff is a tax, plain and simple," said Matthew Shay, president and CEO of the NRF.