US imposes steel tariffs on allies; EU, Mexico, Canada to retaliate

The Trump administration announced Thursday it will impose tariffs on imported steel and aluminum from Mexico, Canada and the European Union (EU) beginning Friday, June 1.

Under the new trade policy originally announced in March, steel and aluminum products from all three will be subject to the same duties imposed on imported steel and aluminum from other nations.

In a swift reaction to the new import duties, Mexico said it would earmark some U.S. steel products, fruit, meats and cheese for tariffs.

Similarly, Canada announced it is considering retaliatory measures against U.S. goods, but did not reveal specifics, although Prime Minister Justin Trudeau called America’s action “totally unacceptable.”

The EU, for its part, said was weighing similar measures, on up to $7.5 billion on goods, some of which could be imposed as early as June 20.

“This is protectionism, pure and simple.  We will defend the Union’s interests, in full compliance with international trade law,” European Commission President Jean-Claude Juncker said Thursday.

The EU also stated its intent to lodge a complaint at the World Trade Organization over the new tariffs.

Although the White House appeared resolute no further exemptions were forthcoming, in a conference call from Paris, Secretary of Commerce Wilbur Ross told reporters the administration was hopeful its trading partners could salvage a deal in which tariffs could be avoided.

“We continue to be quite willing and indeed eager to have further discussions with all of those parties,” Ross said. 

A policy first announced on March 1, the White House had exempted Canada and Mexico as discussions were underway to renegotiate the North American Free Trade Agreement (NAFTA).

Weeks later, Mr. Trump announced the tariffs would be suspended against Canada, Mexico, the EU and four other nations until May 1, in the attempt to stimulate ongoing negotiations over the tariffs, including NAFTA talks, which failed to progress “and therefore (Canada and Mexico) were added into the list of those who will bear tariffs,” according to Ross.

While excise taxes will remain on imported Japanese goods, no tariffs were leveled on Australia, Brazil or Argentina in exchange for limiting steel imports to the U.S.

 

[Bloomberg via Fortune] [AP] [CNBC] [Photo courtesy Birmingham Business Journal]

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