Tariffs on key U.S. allies prompt retaliation threats
Trump plan to tax steel and aluminum imports could inflate prices
WASHINGTON — The Trump administration’s announcement Thursday that it will impose tariffs on steel and aluminum imports from Europe, Mexico and Canada drew swift vows of retaliation from key allies, inflamed trade tensions and sent stock markets sinking.
The administration’s move threatens to inflate prices for U.S. consumers and companies and heighten uncertainty for businesses and investors across the globe.
Commerce Secretary Wilbur Ross said the tariffs — 25 percent on imported steel and 10 percent on aluminum — would take effect Friday.
In imposing them, the administration is following through on a pledge to do so after having earlier granted exemptions to the affected nations to try to buy time for negotiations.
The U.S. tariffs coincide with — and could complicate — the Trump administration’s separate fight over Beijing’s strong-arm tactics to overtake U.S. technological supremacy and negotiations to rewrite the North American Free Trade Agreement.
President Donald Trump had announced the tariffs in March, saying they were necessary to protect the United States from unfair competition and thereby bolster national security.
But in targeting its own allies, the U.S. tariffs will widen a rift with normally friendly trading partners.
The European Commission’s president, Jean-Claude Juncker, said Trump’s action Thursday amounted to trade protectionism
and that Europe would respond with countermeasures.
In Canada, Prime Minister Justin Trudeau said: “These tariffs are totally unacceptable.”
“Canada buys more American steel than any other country in the world, half of U.S. steel exports, Trudeau added. He said Canada would pursue retaliatory penalties on a range of U.S. goods.
Mexico said it would penalize U.S. imports including pork bellies, apples, grapes, cheeses and flat steel.
The tariffs represented the latest tactic in Trump’s “America First” agenda, which has unnerved traders and investors and raised the specter of a trade war involving the U.S. and China — the world’s two largest economies — as well as other key nations.
The trade actions have also opened the U.S. to criticism that it’s burning bridges just as Trump is seeking to rid North Korea of nuclear weapons and help stabilize the Middle East.
“We are alienating all of our friends and partners at a time when we could really use their support,” said Wendy Cutler, a former U.S. trade negotiator who is now vice president at the Asia Society Policy Institute.
Ross said Thursday that talks with Canada and Mexico over revising NAFTA were “taking longer than we had hoped.” Negotiations with Europe had
“made some progress” but not enough for additional exemptions, the commerce secretary said in a conference call from Paris.
“We continue to be quite willing and indeed eager to have further discussions,” Ross said. He said he would travel to China on Friday for trade talks this weekend.
European officials, bracing for the tariffs, have threatened to retaliate against U.S. orange juice, peanut butter, kitchenware, clothing and footwear, washing machines, textiles, whiskey, motorcycles, boats and batteries. The EU will decide exact countermeasures in coming weeks, according to the French officials.
The EU said it would take action Friday through the World Trade Organization, setting in motion a process aimed at settling the dispute over the penalties.
The tariffs could hinder the negotiations among the North American neighbors. Ross said there was “no longer a very precise date when they may be concluded and therefore [Canada and Mexico] were added into the list of those who will bear tariffs.”
Brazil, Argentina and Australia have agreed to limit steel shipments to the U.S. in exchange for being spared the tariffs, the Commerce Department said. Tariffs will remain on imports from Japan.