After 2 days of tense negotiations, the #UnitedStates & #China appear to have walked back from the brink of a devastating economic conflict — maybe.

Officials from the 2 countries reached a handshake agreement in the early hours of Wednesday in London to remove some of the harmful measures they had used to target each other’s economies as part of a clash that rapidly intensified in recent months.

“#GDP would immediately contract by 1.4%, &, eventually, by 2.6%. In 20yrs, the #US #economy would shrink nearly 6%—or $1.6 trillion. #Trump’s plan would lead to a dire shortage of low-wage workers, which would ‘bring on a #recession while reigniting #inflation,’ predicts Robert J. Shapiro, a fmr undersecretary of #commerce in the Clinton admin.”

The #Aluminium Assn of #Canada said in a statement on Tues that the expanded #tariff “makes Canadian exports to the US economically unviable” & that “the industry may be forced to diversify #trade toward the #EuropeanUnion.”

#Electricity accounts for about 40% of the cost of smelting aluminum, & the trade group estimated that replacing Canadian aluminum w/ #US production would require the expansion of US power generation equivalent to 4 Hoover Dams.

The previous 25% #tariff on #steel already had an effect on #Canada’s producers. The steel association estimates that since the tariff went into effect in March, steel shipments to the #UnitedStates from Canada have fallen 30%.

“Steel #tariffs at this level will create mass disruption & negative consequences across our highly integrated steel #SupplyChains & customers on both sides of the border,” Ms. Cobden said.

#Canada is the largest foreign supplier of both #steel & #aluminum to the #UnitedStates. #Mexico, #Brazil, #SouthKorea & #Germany are also major suppliers of steel, while the #UAE, #China & South Korea supply the #US with small amounts of aluminum.

Catherine Cobden, the president of the Canadian Steel Producers Association, a #trade group, said doubling the #tariff on imported steel “essentially closes the U.S. market to our domestic industry.”

…Economists have pointed out that #tariffs on factory inputs such as #metals risk slowing #US #manufacturing, since they raise #prices for factories.…

An analysis published by the US #InternationalTrade Commission, an independent, bipartisan govt agency, suggested that while the steel & #aluminum tariffs levied in #Trump’s 1st term helped American steel & aluminum producers, they hurt the broader #economy by raising prices for many other industries….

…Companies that use #steel & #aluminum to make their products criticized the #tariffs, saying they would add #costs for American #consumers.

Robert Budway, the president of the Can Manufacturers Institute, said doubling the steel tariff would further increase the cost of canned goods at the #grocery store.

“This cost is levied upon millions of American families relying on canned #foods picked & packed by US #farmers & can makers,” he said.

They were announced during #Trump’s visit to a #US #Steel mill last week, & appear to be aimed at currying favor w/ #steelworkers & the steel industry, including those in swing states like #Pennsylvania, where #USSteel is based.
The higher #tariffs have already rankled close #allies that sell #metal to the #US, including #Canada & #Europe. They also sent alarms to #automakers, #plane #manufacturers, #HomeBuilders, #oil drillers & others that rely on buying metals.

But a U.S. official told Reuters said it appears #China was moving slow on promises to issue export licenses for rare earth #minerals.

US #Trade Rep Jamieson Greer also told CNBC that China was not in compliance with the Geneva deal, adding: "The Chinese are slow-rolling their compliance, which is completely unacceptable & it has to be addressed."