U.S. tariffs ratchet up trade war with allies
WASHINGTON — President Donald Trump plans to announce as soon as Thursday the imposition of sweeping tariffs on steel and aluminum imports from Canada, Mexico and the European Union, three people familiar with the plan said.
Frustrated over the failure of those U.S. trading partners to agree to a range of demands, the president chose to sharply escalate his global trade war rather than grant further tariff waivers.
The import taxes could take effect as soon as Friday. The move is likely to have an immediate impact on global trade in steel and aluminum, particularly between the United States and Canada. The decision also invites retaliation from each of the trading partners.
Trump’s bold tariff move threatens to upend negotiations over a new North American trade deal. Over the Memorial Day weekend, Canadian officials including Prime Minister Justin Trudeau and Foreign Minister Chrystia Freeland engaged in a desperate bid to head off the tariffs, according to one source who asked for anonymity to discuss confidential discussions.
Imposing the metals tariffs on the EU will also intensify a clash with the European Union over multiple tariffs, Washington’s efforts to prevent multinational businesses from trading with Iran and a new digital privacy policy.
The European Union symbolizes everything Trump hates about globalization. While his complaints about China may be better known, he has long chafed at the EU’s trade practices.
The U.S. last year incurred a trade deficit of more than $150 billion with the EU, it’s No. 1 trading partner, which Trump has labeled “unacceptable.”
The president has been especially zealous about the automobile industry. The EU adds a 10 percent import tax to American passenger cars while European cars arriving in the U.S. face just a 2.5 percent duty.
The EU’s shared sovereignty also rebukes Trump’s nationalist preference for bilateral trade deals, as he made clear last month during a visit by French President Emmanuel Macron.
“Trade with France is complicated because we have the European Union,” Trump said.
Commerce Secretary Wilbur Ross introduced a fresh irritant into strained transatlantic ties Tuesday when he complained that the EU’s new General Data Protection Regulation, which took effect last week, will prompt major changes in American companies’ responsibilities to protect consumers’ privacy. “GDPR’s implementation could create unnecessary barriers to trade, not only for the U.S. but for everyone outside the EU,” Ross wrote in an op-ed for the Financial Times. “We do not have a clear understanding of what is required to comply.”
The Commerce secretary’s broadside comes as the U.S. and EU are embroiled in several disputes. On Friday, the EU’s exemption from U.S. steel and aluminum tariffs expires, and despite pleas from European officials, the administration has given no sign it plans to grant an extension.
Trump also recently threatened to impose tariffs on imported automobiles, which would hit Germany, Europe’s largest economy, especially hard. And European companies will be affected by the reimposition of U.S. sanctions on Iran, Treasury Secretary Steven Mnuchin told Congress last week.
As those sanctions — designed to isolate Iran’s banks and weaken its economy — are implemented this summer, European companies will face a choice between trading with Iranian customers or enjoying access to the U.S. financial system. “European companies will scream and that will be a bigger crisis than the steel tariffs,” said William Reinsch, a senior adviser at the Center for Strategic and International Studies. “It’s a struggle of will, and it’s a struggle of law.”