The global trade storm intensifies.
Trump uses tariffs to reshape the US steel industry. Photo by Jin Yan
The Trump administration is urging countries to submit their most favorable trade proposals by Wednesday, June 4, in an effort to accelerate discussions with multiple trading partners ahead of a self-imposed deadline in five weeks.
Text | Special Contributor Jin Yan of Caijing, from Washington
Editor | Su Qi
Global trade is facing a new round of uncertainty. New trade conflicts are rapidly escalating.
To reshape the US steel industry, US President Trump said on Friday, May 30, that starting from June 4, the tariffs on imported steel and aluminum in the United States will be raised from the current 25% to 50%. A spokesman for the European Commission expressed strong regret over this and said that the EU is ready to implement countermeasures. The countermeasures the EU is ready to implement include responding to the latest tariff hike by the United States. If an acceptable solution for both sides cannot be reached, the existing and additional measures of the EU will take effect on July 14, and it is not ruled out that the relevant measures may take effect earlier.
In recent months, global steel prices have been falling, which makes it easier for steel buyers to pay the existing import tariffs and still purchase steel at a price lower than the US domestic level. The increased tariffs will also give US domestic steel manufacturers greater pricing power. Steel demand and prices have been cooling since April.
On June 2 local time, the Trump administration asked the federal appellate court to block the order of the previous ruling by the US District Court for the District of Columbia that its tariff policy was "illegal." On May 29, the US District Court for the District of Columbia in Washington, D.C., issued a preliminary injunction against the tariff measures imposed by the Trump administration on multiple countries under the International Emergency Economic Powers Act. The ruling was in response to a lawsuit filed by two small US businesses against the federal government on April 22. On May 28, the US Court of International Trade in New York ruled to ban the implementation of the executive order of the Trump administration to impose tariffs on multiple countries under the International Emergency Economic Powers Act. On the 29th, the US Federal Circuit Court of Appeals approved the request of the Trump administration and temporarily suspended the ruling made by the US Court of International Trade.
The cost of tariffs has begun to seep into the supply chains of US companies, and inflation has affected the purchasing power of US consumers. Photo by Jin Yan
According to another report, the Trump administration is urging countries to submit their most favorable trade proposals by Wednesday, June 4. The report cited a draft letter to negotiation partners. This move is to accelerate discussions with multiple partners ahead of a self-imposed deadline in five weeks. This document from the Office of the US Trade Representative reveals Trump's strategy for completing extensive negotiations with many countries. These negotiations began on April 9 when he temporarily postponed the "Liberation Day" tariffs for 90 days until July 8 after the market strongly reacted to the scope of these extensive tariffs.
According to the draft, the United States asks countries to outline their best proposals in key areas. These include proposals for tariffs and quotas on purchasing US industrial and agricultural products, as well as plans to address any non-tariff barriers. Other requests cover commitments in digital trade, economic security, and country-specific obligations.
The United States will review these responses in the coming days and propose "possible implementation plans," which may include reciprocal tariff rates. It is not yet clear which specific countries the letter will be sent to, but it is aimed at those countries that are actively negotiating, including document exchanges and meetings.
In another battlefield provoked by the United States, various noises have also begun to appear in the China-US trade dispute. There have been continuous reports from the US side that China has violated the consensus reached in the China-US Geneva economic and trade talks. These latest signs indicate that the negotiations, which were originally moving towards an agreement, have now encountered setbacks, and market sentiment has been under pressure as a result.
In response, the Chinese Ministry of Commerce said that after the China-US Joint Statement on the Geneva Economic and Trade Talks was issued on May 12, China cancelled or suspended relevant tariff and non-tariff measures against the US "reciprocal tariffs" in accordance with the consensus reached in the joint statement. China, in a responsible manner, takes the consensus of the Geneva economic and trade talks seriously, strictly implements it, and actively safeguards it. China is firm in safeguarding its rights and is honest in implementing the consensus. In contrast, after the Geneva economic and trade talks, the US has successively introduced a number of discriminatory restrictive measures against China, including issuing guidelines for AI chip exports, stopping the sales of chip design software (EDA) to China, and announcing the revocation of visas for Chinese students. These actions seriously violate the consensus reached in the phone call between the two heads of state on January 17, seriously undermine the existing consensus of the Geneva economic and trade talks, and seriously damage China's legitimate rights and interests. The US unilaterally keeps provoking new economic and trade frictions, exacerbating the uncertainty and instability of bilateral economic and trade relations. Instead of reflecting on itself, it shifts the blame and groundlessly accuses China of violating the consensus, which seriously deviates from the facts. China firmly rejects such unreasonable accusations.
With Trump's so-called "Liberation Day" tariffs, the cost of tariffs has begun to seep into the supply chains of US companies, appear on the shelves of retailers, and push up inflation data to a worrying level. The latest research by Morgan Stanley shows that this wave of price increases may only have a one-time boost to inflation, rather than a long-term structural rise. Morgan Stanley economists said in a recent report that by obtaining signals from multiple data sources and measuring indicators, the results show that the expectations are consistent with the change in the post-tariff price level and will not have an impact on the long-term inflation rate.
This article is from the WeChat public account "Caijing Magazine", author: Jin Yan.
