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US PRESIDENT DONALD Trump has held off on imposing controversial tariffs on steel and aluminum from Canada, Mexico and the European Union, offering them a 30-day reprieve after fears of a trade war spooked Wall Street. The 25% tariffs on steel and 10% duties on aluminum were set to go into effect today, as temporary exemptions granted in March to Canada, Mexico, the EU and other US allies expired. London welcomed the “positive” decision. “We will continue to work closely with our EU partners and the US government to achieve a permanent exemption, ensuring our important steel and aluminum industries are safeguarded,” a British statement read.
“We remain concerned about the impact of these tariffs on global trade and will continue to work with the EU on a multilateral solution to the global problem of overcapacity, as well as to manage the impact on domestic markets.” Europe had lined up its own punitive tariffs on American imports, including iconic items like Harley-Davidson motorbikes, blue jeans and bourbon whiskey – but for now, instead, negotiations will continue. The Trump administration is “extending negotiations with Canada, Mexico and the European Union for a final 30 days”, the White House said in a statement.
In formal proclamations, Trump said the “necessary and appropriate means to address the threat to the national security” posed by the metal imports is to “continue these discussions and to extend the temporary exemption of these countries”. The US also announced it had finalised a trade deal with South Korea, which includes several concessions made by Seoul, including extended tariffs on pick-up trucks and a quota on its steel exports. Washington has “agreements in principle” with Argentina, Australia and Brazil, “the details of which will be finalised shortly”, the statement said. In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security. The Trump administration has told trading partners they must make concessions, but the EU has insisted it will not negotiate without first obtaining a permanent exemption.
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Extensions for Canada and Mexico had been expected, as Mexico City, Ottawa and Washington work on revamping the North American Free Trade Agreement. Trade ministers from the three countries met last week to advance talks on revising the 24-year-old Nafta and made enough progress that they have set their next ministerial meeting for 7 May. Canada exported over $12 billion (€9.94 billion) of steel and aluminum to the United States in 2017, with another $3 billion (€2.5 billion) from Mexico. ‘Patient’ But an extension for the EU was less of a foregone conclusion. The bloc’s top trade official Cecilia Malmstrom was lobbying US Commerce Secretary Wilbur Ross in last-ditch talks but prospects looked dim – and the EU warned it was ready to act. The EU’s three largest economies – Britain, France and Germany – held crisis talks on Sunday and the French presidency said afterward they had agreed “the EU must be ready to act” if Washington presses ahead with the tariffs. Trump met French President Emmanuel Macron and German Chancellor Angela Merkel last week, but gave no indication of whether he planned to exempt the EU, which last year exported over $7.7 billion (€6.38 billion) of steel and aluminum to the US market.
Germany warned last week it expected Washington to impose the tariffs from 1 May, although a key economic advisor to Trump hinted on Thursday that EU concessions in the car sector might be enough to win an exemption. “It’s very important that so many of our friends make some concessions with respect to trading practices, tariffs and taxes,” National Economic Council Director Larry Kudlow told CNBC. It remains to be seen how Brussels will react to Trump’s decision. US markets were certainly unhappy about the prospect of a wider trade war. The Dow, the Nasdaq and the S&P 500 all closed down yesterday, with investors uneasy ahead of the Trump administration’s tariffs move. Embed this post To embed this post, copy the code below on your site 600px wide 400px wide 300px wide.
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