US President Donald Trump last night reiterated his plan to slap big tariffs on imports of steel and aluminum, warning he would hit the European Union with a “big tax” if the bloc fights back.

Trump’s proposed trade war has resulted in Gary Cohn, top economic adviser to the White House, quitting — the latest in a series of high-profile Trump administration departures.

Cohn’s resignation has been followed by the International Monetary Fund’s Managing Director Christine Lagarde saying that nobody wins in a trade war and that the macro-economic impact of US tariffs on imports would be serious if other countries respond with tariffs of their own.

Meanwhile, the Trump administration is reportedly considering tariffs on Chinese imports.

There are fears the US could impose tariffs on a wide range of Chinese imports from shoes and clothing to tech gadgets, it was reported by Bloomberg.

The likes of US companies iPhone maker Apple and online retailer Amazon could be hurt by the move, while Chinese gadget makers Xiaomi and Lenovo could suffer coming the other way.

What was said:

Speaking to French radio station RTL on Wednesday, Lagarde said:

The macro-economic impact would be serious, not only if the United States took action, but especially if other countries were to retaliate, notably those who would be most affected, such as Canada, Europe, and Germany in particular.

In a so-called trade war, driven by reciprocal increases of import tariffs, nobody wins, one generally finds losers on both sides.

US Treasury Secretary Steven Mnuchin weighed in yesterday, saying that the US is not provoking a global trade war but instead wants its companies to get equal treatment in other countries.

The Treasury chief told a House Appropriations subcommittee:

We’re not looking to get into trade wars. We’re looking to make sure that U.S. companies can compete fairly around the world.

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President Trump has been very clear: We want to make sure U.S. companies have the same ability to do business in China as Chinese companies have here.

Our priority at the moment is to renegotiate NAFTA and to focus on our trade relationships with China and have fair and balanced trade with China.

Swedish prime minister Stefan Löfven said at a press conference yesterday:

The United States has been taken advantage of by other countries, both friendly and not so friendly, for many, many decades, and we have a trade deficit of $800bn per year, and that’s not going to happen with me.

The European Union has been particularly tough on the United States. They make it almost impossible to do business with them, and yet they send their cars and everything else back into the United States. They can do whatever they like but if they do that, then we put a big tax of 25% on their cars and believe me, they won’t be doing it very long.

House speaker, Paul Ryan, and the Senate majority leader, Mitch McConnell, who have also publicly urged the White House to abandon the tariffs proposal.

Chaos at the White House?

Meanwhile, Trump tried to play down Cohn’s resignation.

News of Cohn’s resignation came shortly after Trump claimed that, despite recent turmoil, morale on his team was high. He said: “The White House has tremendous energy, it has tremendous spirit.”

In a statement given to the New York Times, which first broke the story of Cohn’s White House departure, Trump said:

Gary has been my chief economic adviser and did a superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again. He is a rare talent, and I thank him for his dedicated service to the American people.