May 31, 2018
President Trump followed through on a threat to impose steep metal tariffs on U.S. allies Thursday, a long-promised decision that could spark retaliatory trade barriers on a host of U.S. products.
Trump imposes steel, aluminum tariffs on U.S. allies and Europe plans to retaliate
Commerce Secretary Wilbur Ross said that Canada, Mexico and the European Union would be subject to a 25% tariff on steel and a 10% tariff on aluminum beginning at midnight. Other countries, including Argentina and Brasil, agreed to limit metal exports.
"The president’s overwhelming objective is to reduce our trade deficit," Ross said. "We believe that this combined package achieves the original objectives that we had set out, which was mainly to constrict the import of steel and aluminum."
European trade officials have previously threatened to respond to Trump's move with duties on U.S.-made motorcycles, orange juice and bourbon, among other things. French Finance Minister Bruno Le Maire said Wednesday that the European response to increased tariffs would be “united and firm.”
Trump announced the tariff and aluminum tariffs in early March, but offered temporary exemptions to the Europe Union, Canada, Mexico and a number of other allies. He extended those exemptions in late April, noting at the time it would be the "final" delay unless the countries agreed to other concessions.
"We are awaiting their reaction," Ross said of the other countries. "We continue to remain quite willing, indeed eager, to continue discussions."
The decision comes days after the Trump administration announced $50 billion of new tariffs on Chinese imports, after officials had earlier said it was "putting the trade war on hold" with Beijing. Ross told reporters Thursday that he still expects to travel to China to continue trade talks this weekend.
The Trump administration has relied on a 1962 law that allows countries to impose trade restrictions for national security purposes. The president has also justified the tariffs by pointing out “shuttered plants and mills,” and the decades-long slide of manufacturing.
Trump last week ordered officials to investigate whether auto tariffs are also required to maintain national security, a move largely seen as a negotiating tactic amid U.S. talks with Canada and Mexico over the drafting of a new North American Free Trade Agreement.
The U.S. imported 34.6 million metric tons of steel last year, a 15 percent increase from 2016, according to the U.S. Department of Commerce. Canada is the largest exporter of steel to the U.S., followed by Brazil, South Korea and Mexico.
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