The Trump administration has worked for months to come to agreements to limit the dumping of aluminum and steel into the United States. While the U.S. has reached satisfactory trade agreements with a few nations on aluminum and steel imports, most will be hit with severe tariffs and restrictions beginning at Midnight Thursday night ending a 2-month exemption for those countries.
“Today, President Trump announced that he is taking action to protect America’s national security from the effects of global oversupply of steel and aluminum,” the White House said in a statement Thursday. “Following extensive discussions and a months-long process, the President will implement tariffs on steel and aluminum imports from Canada, Mexico, and the European Union.”
The U.S. reached satisfactory trade agreements with Australia and Argentina on aluminum imports which will exempt them from a 10% duty that begins Friday morning on all imports from the remaining countries/regions of the European Union, Canada, Mexico, and Brazil. Argentina has agreed to quantity restrictions, quotas, to avoid duties on its aluminum exports to the U.S.
The U.S. Commerce Department has also reached agreement on the importation of steel from Australia, Argentina, and Brazil which will prevent their steel products from incurring a 25% duty set to begin at 12:01 a.m. EDT Friday morning for the European Union, Canada, Mexico, South Korea and other countries not exempted.
The heavy tariffs are in response to what President Trump says are import levels that “threaten to impair the national security of the United States.” According to Department of Commerce reports, the heavy importation of cheap aluminum and steel, necessary for the manufacture of military hardware and consumer goods, has nearly destroyed the American steel industry and severely hurt the U.S. aluminum sector. Should conflict with other nations break out, and a major supplier decide to sanction or stop exporting to the United States, our ability to defend ourselves or maintain our economy could be threatened.
“In January 2018, the Department of Commerce delivered two reports on steel and aluminum investigations conducted under Section 232 of the Trade Expansion Act of 1962,” the White House said in a statement. “The reports found that the excessive level of imports threatened to impair the national security because further closures of domestic production capacity would result in a situation where the United States would be unable to meet demand for national defense and critical infrastructure in a national emergency.”
The reports found that the excessive level of imports threatened to impair the national security because further closures of domestic production capacity would result in a situation where the United States would be unable to meet demand for national defense and critical infrastructure in a national emergency.
The U.S. has been in negotiations over a modernized NAFTA with Canada and Mexico that would likely include trade agreements on aluminum and steel, but as those talks have not yet produced an agreement, the president has ended a 2-month exemption granted on May 1.
Commerce Secretary Wilbur Ross said the exemptions would end in part because NAFTA talks are “taking longer than we had hoped.” Negotiations with Europe have “made some progress” but not gone far enough to warrant more relief from the tariffs, he added.
The EU, Canada and Mexico have all vowed trade actions in return for what it says are “unjustified” moves by the Trump administration.
“So we will immediately introduce a settlement dispute with the WTO [World Trade Organisation] and will announce counter-balancing measures in the coming hours,” European Commission President Jean Claude-Juncker said.
“We will immediately introduce a settlement dispute with the WTO [World Trade Organisation] and will announce counter-balancing measures in the coming hours,” he added.
Mexico has threatened duties on pork bellies, apples, grapes, cheeses and flat steel, among other products in response to the U.S. tariffs. The EU could impose tariffs on Whiskey, peanut butter, cranberries and other products.
The United States is hoping to get separate bilateral agreements with the EU and a renegotiated NAFTA with its North American trade partners.
“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.Wake up Right! Subscribe to our Morning Briefing and get the news delivered to your inbox before breakfast!