US levies steel, aluminum tariffs on allies
Both sides say the other responsible for any escalation
WASHINGTON/PARIS (Reuters) – Washington was set to impose tariffs on steel and aluminum imports from the European Union, Canada and Mexico starting at midnight on Thursday, ending months of uncertainty over potential exemptions and sharply escalating the risk of a trade war.
US Commerce Secretary Wilbur Ross told reporters in a telephone briefing that Washington would proceed with plans for a 25% tariff on steel and a 10% tariff on aluminum imports, although he said the door was still open for negotiations without specifying what measures could be taken.
“We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved,” Ross said.
The tariffs, which have prompted several challenges at the World Trade Organization, are aimed at allowing the US steel and aluminum industries to increase their capacity utilization rates above 80% for the first time in years.
Worries about a US trade war with the European Union weighed on Wall Street stocks at the open, but shares of US steel and aluminum makers were up strongly.
President Donald Trump’s administration has threatened to impose tariffs on car imports, is engaged in negotiations with China to reduce America’s yawning trade deficit and has said it will punish Beijing for stealing its technology by imposing tariffs on $50 billion of imports from China.
Ross himself heads to Beijing on Friday where he will attempt to get firm deals to export more US goods in a bid to cut America’s $375b. trade deficit with China.
After months in which it appeared the Trump administration had been backing away from tariffs amid infighting between the president’s top economic advisers, Washington has over the past week ramped up its threats on trade.
German magazine Wirtschaftswoche reported on Thursday that Trump had told French President Emmanuel Macron he wanted to stick to his trade policy long enough that Mercedes-Benz cars were no longer cruising through New York. That share prices of BMW, Daimler and Volkswagen.
The Trump administration launched a national security investigation last week into car and truck imports, using the same 1962 law that he has applied to curb incoming steel and aluminum.
France’s Finance Minister Bruno Le Maire had met with Ross on Thursday in a bid to end the standoff over steel and aluminum, a move that ultimately failed to sway the US administration.
“It’s entirely up to US authorities whether they want to enter into a trade conflict with their biggest partner, Europe,” Le Maire told reporters after the meeting.
Europe did not want a trade war, he said, but Washington had to back down from “unjustified, unjustifiable and dangerous tariffs.” The European Union would respond with “all necessary measures” if the United States imposed them.