US delays metal tariffs on Canada, EU, Mexico

The European Commission says US President Donald Trump's decision not to impose steel and aluminium tariffs on the EU for now prolongs business uncertainty and repeats its call for a permanent exemption. But markets welcomed the delay.
A worker at a stainless steel wire factory in Huamantla, Mexico. In March, US President Donald Trump imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium, leading to increased friction with the US' trading partners worl
A worker at a stainless steel wire factory in Huamantla, Mexico. In March, US President Donald Trump imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium, leading to increased friction with the US' trading partners worldwide.PHOTO: REUTERS

No further extensions beyond June 1; Australia, Argentina, Brazil get permanent exemptions

WASHINGTON • US President Donald Trump has postponed the imposition of steel and aluminium tariffs on Canada, the European Union and Mexico until June 1, and has reached agreements for permanent exemptions for Argentina, Australia and Brazil, the White House said on Monday.

The decisions came just hours before temporary exemptions from the tariffs on these countries were set to expire at midnight on Monday.

In a statement, the White House said the details of the deals with Brazil, Argentina and Australia would be finalised shortly, and it did not disclose terms.

"The administration is also extending negotiations with Canada, Mexico and the European Union for a final 30 days. In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security," the White House added.

A source familiar with the decision said there would be no further extensions beyond June 1 to stave off tariffs.

Mr Trump on March 23 imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium, but granted temporary exemptions to Canada, Mexico, Brazil, the EU, Australia and Argentina. He has also granted a permanent exemption on steel tariffs to South Korea as part of a revision of a free trade pact that he sharply criticised.

Australian Prime Minister Malcolm Turnbull and Trade Minister Steven Ciobo welcomed the tariff exemption, and said the country would continue to work with Washington to prevent dumping.

"The exemption reflects the fair and reciprocal trade relationship Australia shares with the United States and underpins the unbreakable friendship between our two great nations," both of them said in a statement.

In response to the postponement, the European Commission yesterday called for a permanent exemption from US steel and aluminium tariffs and said Mr Trump's decision to extend its temporary exemption for a month prolonged business uncertainty.

"The US decision prolongs market uncertainty, which is already affecting business decisions," it said.

"The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security," it continued, adding that overcapacity in steel and aluminium was not from Europe.

Germany also said it still expects a permanent exemption.

"Neither the European Union nor the United States can have an interest in an escalation (in tensions) in trade relations," said Germany's deputy government spokesman Martina Fietz.

"Rather, both the US and the EU would benefit from further deepening trade relations."

Mr Trump has invoked a 1962 trade law to erect protections for US steel and aluminium producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China.

The tariffs, which have led to increased friction with the US' trading partners worldwide and have prompted several challenges before the World Trade Organisation, are aimed at allowing the two US metal industries to increase their capacity utilisation rates above 80 per cent for the first time in years.

Trump administration officials have said that in lieu of tariffs, steel-and aluminium-exporting countries would have to agree to quotas designed to achieve similar protections for US producers.

South Korea earned its permanent exemption from steel tariffs by agreeing to quotas that will cut its steel shipments by about 30 per cent from 2017 levels.

The White House said the agreements reflect administration efforts "to reach fair outcomes with allies to protect our national security and address global challenges to the steel and aluminium industries".

REUTERS

SEE WORLD

A version of this article appeared in the print edition of The Straits Times on May 02, 2018, with the headline 'US delays metal tariffs on Canada, EU, Mexico'. Print Edition | Subscribe