THERE’S nothing like a trade war — or even the possibility of one — to get those juices flowing. Tit-for-tat tariffs, restrictions on imports and tough talk of retaliation and sanctions. Who could ask for more?

True, trade wars fade in comparison to the excitement generated by real wars. But in the 21st century they are the second best thing. As US President Donald Trump knows only too well.

But, wait. There is a deadly “real war” underway in eastern Ghouta in Syria. The United Nations children’s agency, Unicef, has warned that the besieged Syrian enclave has become a “hell on earth” for children.

Unicef is asking for urgent aid even as reports come in that the Syrian government may have used chemical weapons in the conflict.

The United Nations High Commissioner for Human Rights, the indomitable Zeid Ra’ad Al Hussein, has slammed the Syrian regime for its “legally and morally unsustainable” attempts to justify attacks on civilians in eastern Ghouta.

Speaking at the 37th session of the UN Human Rights Council, Ra’ad Al Hussein said: “Recent attempts to justify indiscriminate, brutal attacks on hundreds of thousands of civilians by the need to combat a few hundred fighters as in eastern Ghouta, are legally, and morally, unsustainable.

“It is urgent to reverse this catastrophic course, and to refer Syria to the International Criminal Court,” he added.

But world “leaders” are worried about something else. The US president is preoccupied with “saving” the American steel and aluminium industry from foreign competition. China and the EU are equally engaged in preparing for retaliatory measures.

So while the tragedy in Syria unfolds, it’s the “steel war” that is picking up momentum, with the US, Europe and China sinking deeper and deeper into a bruising trade competition from which no one is expected to emerge unscathed.

President Trump says he is pressing ahead with the imposition of 25 per cent tariffs on steel imports and 10pc on aluminium, although there is hope that the deal could exempt Canada and Mexico and other allies. As top economic adviser Gary Cohn said he was leaving the White House after breaking with the US president on trade policy, the latest in a string of high-level departures from the West Wing, US policy on China appears to be in the hands of Peter Navarro, a fierce advocate for steel and aluminium tariffs who is now a leading anti-China voice on trade in the White House.

“I’m sticking with 10 and 25 [per cent] initially. I’ll have a right to go up or down, depending on the country, and I’ll have a right to drop out countries or add countries,” Trump told reporters last week.

Certainly, the US president can wax and wane on the tariffs and has the final word on who to target. He can change his mind as he wishes. China is the enemy today, but tomorrow could be friend and partner. Ditto for Europe. Life is complicated.

But here’s the thing. Talk of tariffs has already raised the prospect of a global trade war and hit stock markets hard. Both the EU and China have said they would retaliate against action by the US, as have Mexico and Canada.

“If Donald Trump puts in place the measures this evening, we have a whole arsenal at our disposal with which to respond,” European Financial Affairs Commissioner Pierre Moscovici said.

Countermeasures would include European tariffs on US oranges, tobacco and bourbon, he said. Harley Davidson Inc motorcycles have also been mentioned, targeting House of Representatives Speaker Paul Ryan’s home state of Wisconsin.

Such a move by the United States would “put thousands of European jobs in jeopardy, and it has to be met by a firm and proportionate response”, underlined Cecilia Malmstrom, the EU commissioner for trade.

If the American tariffs are put in place, Ms Malmstrom said, Brussels could take three steps: it could take the case to the World Trade Organisation, add safeguards to protect the EU against steel diverted from the United States, and impose tariffs on a series of American-made goods.

The prospect of a trade war between China and the United States has also increased after Beijing’s foreign minister said it would make a “necessary response” in the event of a move by the US to introduce the punitive tariffs.

Having tried through diplomatic channels to stop the US action, China’s foreign minister Wang Yi has warned that Beijing will not take the introduction of tariffs lying down.

Speaking on the sidelines of an annual meeting of China’s parliament, Wang said China and the US did not have to be rivals and history showed that trade wars were not the correct way to resolve problems.

“Especially given today’s globalisation, choosing a trade war is a mistaken prescription. The outcome will only be harmful,” he said, adding: “China would have to make a justified and necessary response.”

If a global steel trade war does erupt, it will be damaging for all concerned, with repercussions that go well beyond trade.

But Washington is no longer the only show in town. Significantly, even as Trump threatened tariffs on steel, 11 nations gathered in Chile signed a landmark Asia-Pacific trade pact that Trump withdrew from last January.

The EU is also moving fast to clinch a trade deal with Japan and is working to strengthen its trade links with other nations. Trump may get his trade war. But the world is moving on. As EU Council President Donald Tusk said last week: “Trade wars are bad and easy to lose”.

So are the tragic real ones where children are being killed every day.

—The writer is Dawn’s correspondent in Brussels

Published in Dawn, March 10th, 2018

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