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Trump starts washing machine war. Will a global trade battle follow?

Bad news for the Brexiteers with their talk of securing an 'easy' trade pact with America. Free trade is in retreat

James Moore
Chief Business Commentator
Tuesday 23 January 2018 09:45 EST
Comments
Donald Trump has started a washing machine war with South Korea
Donald Trump has started a washing machine war with South Korea (AP)

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Donald Trump starting a trade war over South Korean washing machines is clearly a lot better than him kicking off a nuclear one with North Korea.

But don’t underestimate the damage that could be done by this “America First” President’s decision to slap hefty tariffs on imported washers, and on solar panels, many of which come from China, with the stated aim of protecting US manufacturers.

This could be the opening salvo in a much wider conflict. Ominously, US officials have indicated that further “enforcement” actions are coming while a spokesman has talked of the Trump administration “always” defending “American workers, farmers, ranchers and businessmen”.

Describing the tariffs of up to 50 per cent on its washing machines - imposed at the urging of US manufacturer Whirlpool - as “unacceptable” and “regrettable”, South Korea has promised to go to the World Trade Organisation.

Whether that will do it any good is an open question. America has a long track record of ignoring decisions by international bodies it doesn't like. It’s doubtful that the WTO will be any different, particularly not under this President, assuming it rules in South Korea’s favour. America First!

China has also promised to defend its interests, and you can bet that it will.

I wrote a column last week that considered Mr Trump’s dismal approval ratings in the domestic US polls, opining that one way for him to pep them up would be to start a war. George W Bush’s job approval went over 80 per cent in the wake of the September 11 attacks on the US, which were seen to make him a war time leader.

A trade war with China and South Korea is harder to sell in the same terms, but it could serve to swing some of the doubters, some of those attracted initially attracted by Trump's aggressively nationalist rhetoric, firmly back into his corner.

Of course, the problem with conflicts is that they have a habit of escalating, and of drawing others in. Today’s washing machine war with South Korea could quickly go global.

The fact that there would ultimately be no winners from an international trade war is irrelevant to the Trump administration, particularly with mid term elections fast approaching and the President’s opponents scenting blood.

Britain, meanwhile, should view these events with something akin to horror, most of all its Brexiteers.

Boris Johnson has been wittering on about Britain becoming an “agitator for free trade” once shorn of its EU membership. By the time that happens there might not be anyone willing to listen.

As for Stumbledore Liam Fox and his claims of easy trade deals? The prospects of negotiating a favourable deal with the US looked slim before this. They now look all but impossible.

Critics of the EU have described it as protectionist. That may be true, but if the entire world is travelling in that direction the advantages of being inside one of its major blocs become ever more obvious, the chill of being outside ever colder.

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