Tariffs on steel and aluminium: a sword strike into water?

Donald Trump announced beginning of March a number of tariffs for steel and aluminium imports, of 25% and 10%. The only tangible outcomes were a decline of financial markets and retaliation threats by the main US trading partners. As the declared target of the protectionist measures clearly is China, the potentially most affected countries were Canada, Mexico, South Korea and the European Union. In short the allies of the US, who’s exports don’t represent any threat for the security of Uncle Sam. With regards to China, the trade dispute with the US is not about steel or aluminium, but about the technology transfer. As a matter of fact, US companies who wish to export to China are required to transfer the technology to one of their local partners. Yet it happens that the Middle Kingdom takes time to authorise the sale of the US products, time until a Chinese “partner” has developed its own substitution products. As these litigious behaviours are not solved at the WTO, the threat of strong tariffs on steel and aluminium could be a mean for the US negotiators to prompt China to give up its “voluntary” technology transfer policy. It is therefore more a warning shot, than a sword strike into water!