US tariffs hit EU, Mexico, Canada
• Canada, EU and Mexico to bear full brunt of steel and aluminium protectionism
The Trump administration announced it is imposing tariffs on steel and aluminium imported from the EU, Canada and Mexico, in a move almost certain to trigger retaliation by the US’s closest allies.
The Trump administration announced it was imposing tariffs on steel and aluminium imported from the EU, Canada and Mexico, in a move almost certain to trigger retaliation by the US’s closest allies.
The decision came hours before temporary exemptions were due to elapse at 12.01am in Washington on Friday.
The move marks the Trump administration’s most aggressive trade action yet against major US trading partners, which had been asking for permanent relief.
US Commerce Secretary Wilbur Ross said there was not enough progress in discussions with the EU over trade concessions and Canada and Mexico on rewriting the North American Free Trade Agreement (Nafta) to give them permanent exemptions from the metals tariffs.
“We continue to be quite willing and eager to have further discussions with all of those parties,” Ross said on Thursday. “We are awaiting their reaction.”
Stocks in the US fell as the administration ignored the pleas from business lobbying groups including the US Chamber of Commerce to forego tariffs.
Ross said that he was looking forward to “continued negotiations” with Canada, Mexico and EU “because there are other issues” that need to be resolved. There was potential “flexibility” in the future because the president has the power to increase or cut tariffs, remove them or enact quotas, he said.
Fears of a global trade war are mounting as the Trump administration also considers tariffs on US car imports and duties on $50bn in Chinese goods. The IMF has warned that a wave of protectionist forces is the biggest risk to the global economic outlook.
In imposing the tariffs, President Donald Trump invoked a seldom-used section of a 1960s trade law that allows him to erect trade barriers if imports imperil national security.
Trump imposed 25% duties on imported steel and 10% on aluminium in March but he gave temporary reprieve to a handful of allies for further talks to take place.
The EU had said it would not make trade concessions to gain a permanent exemption and vowed to respond firmly to the imposition of tariffs.
The 28-member bloc has threatened to complain to the World Trade Organisation and to impose counter-tariffs on €2.8bn of US imports as soon as June 20.
Canada and Mexico also rejected the Trump administration’s suggestion of linking tariff relief to the outcome of ongoing talks to revamp Nafta.
Canada would respond “appropriately” to any steel and aluminium tariffs, Foreign Minister Chrystia Freeland said on Wednesday. Mexican Economy Minister Ildefonso Guajardo Villarreal said earlier in 2018 that retaliation was an option.
Trump imposed the tariffs in March after his commerce department declared that steel and aluminium imports undermine the country’s manufacturing base and threaten national security. The action was mainly targeted at China over accusations of flooding the global market with cut-rate metals and dragging down prices.
The Trump administration has said a global tariff is necessary because China is shipping its steel through other nations.
The White House action comes as the Trump administration begins a similar national security investigation into car imports that could lead to tariffs.
The probe was seen as an attempt to pressure Mexico and Canada over a Nafta deal.