US SLAPS METAL TARIFFS ON EU, CANADA, MEXICO

Trump had earlier exempted EU from metal tariffs

President Donald Trump intends to impose steep import duties on steel and aluminium imports from Europe starting Friday, after weeks of talks failed to reach a compromise, The Wall Street Journal reported Thursday.

Trade officials from Washington and Brussels had continued discussions to find a solution, such as import quotas, that would convince Trump to extend the exemption for the European Union (EU) from the 25 per cent tariff on steel and 10 per cent on aluminium.

But The Wall Street Journal cited people familiar with the matter saying a last minute deal appeared unlikely, and the tariff announcement could come as early as Thursday. Trump imposed the tariffs in March to address global oversupply of the metals, but though it was largely aimed at China it hit US allies as well.

Washington exempted Canada and Mexico from the tariffs while negotiations continue to revamp the North American Free Trade Agreement, and South Korea agreed to quotas instead of tariffs.

Meanwhile EU is bracing for a trade offensive from Trump. At meetings in Paris this week, EU leaders are staging a last-ditch attempt to convince US Commerce Secretary Wilbur Ross for extended relief from the duties.

Fears of a global trade war are mounting as the Trump administration also considers tariffs on US auto imports and duties on $50 billion in Chinese imports. The International Monetary Fund has warned that a wave of protectionist forces are the biggest risk to the global economic outlook. EU Trade Commissioner Cecilia Malmstrom indicated this week that the 28-member bloc will come up short in its bid for a permanent and unconditional waiver from the duties. German Economy Minister Peter Altmaier, after meeting Ross on Wednesday, said he expects the talks will go right up until the June 1 deadline.

“Let’s see what happens,” Altmaier told reporters on the sidelines of an Organisation for Economic Cooperation and Development conference in Paris. “The European Union is strong enough that we can wait for any kind of decision and respond appropriately.”

For the EU, that means lodging a complaint with the World Trade Organisation and imposing retaliatory tariffs on 2.8 billion euros ($3.3 billion) of American imports as soon as June 20.