Trump to remove tariff exemption from EU, Canada, Mexico

The European Commission’s president, Jean-Claude Juncker, said Trump’s decision amounted to trade protectionism and that Europe would respond with countermeasures.

Reacting to the United States decision to activate tariffs on Canadian steel and aluminum, Ottawa said it would impose its own import levies on over $16 billion worth of U.S. products such as whiskey and orange juice.

The worldwide response to the action was swift. Earlier this week, there were reports that the talks might be canceled following Trump’s renewed threat to impose import taxes on $50 billion in Chinese products. Canada, a staunch USA ally, is the largest supplier of steel and aluminum to the United States.

Yet the hardball US approach to its closest trading partners will make it harder to craft a joint response to Chinese oversupply.

He said Canada would pursue retaliatory penalties on a range of United States goods.

“Any US calls for the European Union to voluntarily place hard limits on its exports of steel were completely unjustified, against WTO rules and run counter to central tenets of free-trade”.

Likewise, the Trump trade team sought to use the tariff threat to pressure Europe into reducing barriers to USA products.

Earlier, in March, Trump had announced that USA would impose a 25 per cent tariff on imported steel and a 10 per cent tariff on imported aluminium for security interests.

“The implementation of new tariffs will disrupt the US oil and natural gas industry’s complex supply chain, compromising ongoing and future USA energy projects, which could weaken our national security”, said API President and CEO Jack Gerard in a statement.

Steel and aluminum exports are significant to Canada’s economy.

Mr. Trump, in his proclamation announcing the new tariffs, said he did it to protect national security.

The hardball tactics will trigger retaliatory tariffs on US goods, hurting exporters, which could further escalate into a tit-for-tat trade war.

“We will consider whatever actions they do take but our focus is as mentioned on national security aspects of steel and aluminum”, he said.

If the USA moves forward with its tariffs, the European Union has threatened to impose retaliatory tariffs on U.S. orange juice, peanut butter and other goods in return. Canada, too, announced its targets for retaliatory tariffs on everything from toilet paper to ballpoint pens.

Canadian Prime Minister Justin Trudeau said: “These tariffs are totally unacceptable”.

Ross said talks with the European Union had failed to reach a satisfactory agreement to convince Washington to continue the exemption from the tariffs imposed in March.

The EU trade commissioner, Cecilia Malmstrom, said Thursday the EU “did everything to avoid this outcome”, as the bloc announced it would bring the case to the World Trade Organization (WTO) on Friday.

Ross downplayed the threats of retaliation, and said talks can continue even amid the dispute to try to find a solution.

The Trump administration is turning to a little-used weapon in trade policy: Section 232 of the Trade Expansion Act of 1962.

“When you look at G7 nations, European allies, Canada, Mexico, it shows that we need to have an opportunity to come together to discuss this directly and firmly and look for opportunities to benefit our citizens, not to harm them”, he continued.

But he says the global trading system “was built to resolve these problems in a way that prevents further escalation”.

United Kingdom producers, like those in mainland Europe, are anxious the tariffs will cause a decline in U.S. demand, while prompting a surge in steel imports diverted from the US. It is already on the brink of one with China over country-specific tariffs aimed at redressing the trade imbalance.

Beyond semantics, Alden said the decision to impose tariffs would cause major economic disruptions across Europe and North America.