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US delays EU tariff decision until June

May 1, 2018

The Trump administration has pushed back its decision on tariffs for steel and aluminum from the European Union and other US allies until June 1. Other countries have managed to secure deals for permanent exemptions.

An employee works in front of the blast furnace in Germany
Image: Getty Images/A. Koerner

With just a few hours to go until temporary tariff exemptions were due to expire, US President Donald Trump has decided to delay the tariff decision for several countries, officials said on Monday.

The Trump administration will extend temporary steel and aluminum tariff exemptions for the European Union, Canada and Mexico until June 1, the White House confirmed in a statement. Reuters news agency and The Wall Street Journal first reported on the decision.

Read moreGerman minister — EU should not risk trade war with US over tariffs dispute

The US has also reached an agreement "in principle" with Australia, Argentina and Brazil concerning aluminum and steel imports, the statement said. A deal to permanently exempt South Korea from the steel tariffs has also been finalized.

The temporary tariff exemptions were due to expire at midnight US Eastern Standard Time (0400 UTC), after which the US allied countries would face import duties of 25 percent on steel and 10 percent on aluminum.

Continued 'uncertainty' for businesses

Erik Brattberg, director of the Europe Program at the Carnegie Endowment for International Peace, told DW that Trump's move to delay the decision will likely only exasperate tensions with Brussels in the long run.

"Although this is obviously a temporary sigh of relief for European leaders, it will do little to satisfy their concerns about Trump's trade policies. The fact that Europe ducked the tariff bullet another time may only be due to active outreach and diplomatic pressure from European leaders," Brattberg said.

Read moreProtectionism: from Bismarck to Trump

Mary Lovely, an economics professor at Syracuse University and senior fellow at the Peterson Institute for International Economics, said the decision may have bought politicians more time, but the uncertainty is bad for businesses.

"The extension of temporary exemptions is not in itself costless. People trying to make investments don't see this as costless, because it adds a great deal of uncertainty into their business operation," she said.

Read moreGermany, the US and non-free trade

Looming trade fight with EU

Trump already imposed the tariffs in March, but granted temporary exemptions to the EU, Canada, Mexico, Australia, Argentina and Brazil. 

South Korea managed to secure its permanent exemption after agreeing to slash its steel exports to the US by around 30 percent.

Read moreEU drags US to WTO over steel, aluminum tariffs

The US administration has justified issuing the tariffs, which are aimed primarily at China, on national security grounds. Washington also told its allies that they must make concessions in order to obtain a permanent exemption.

In a tit-for-tat move, the EU has said it will impose its own tariffs on US exports, including bourbon, motorcycles, peanut butter and makeup. Brussels has said it will not agree to concessions until it first secures an exemption.

On Monday, Canadian Prime Minister Justin Trudeau said any move to impose tariffs on Canada would be a "very bad idea." Canada is the largest steel importer into the US.

Additional reporting by Michael Knigge.

rs/cmk (AP, AFP, Reuters)

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