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US slaps steel and aluminum tariffs on the EU

May 31, 2018

Officials from both sides of the Atlantic were unable to reach a deal to avert tariffs two days before the exemption expires. The EU has said it will announce retaliatory measures shortly.

Aluminium rods at a warehouse in Essen, Germany waiting for shipment. Taken on 04.05.2018.
Image: picture-alliance/dpa/G. Kirchner

US Commerce Secretary Wilbur Ross told reporters on Thursday that a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the EU, Canada and Mexico would indeed go into effect at midnight after those countries were unable to make a deal with the US ahead of a Friday deadline. 

"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.

  • Germany and France condemned US President Donald Trump's plan to impose tariffs, saying both countries are working closely to develop countermeasures.
  • Canada announced retaliatory duties on beef, coffee, candies, plywood and maple syrup, alongside steel and aluminum, amounting to $12.8 billion (€10.9 billion).
  • Mexico said it would impose penalties on steel sheets, lamps, pork leg and shoulder, sausages, apples, grapes and different types of cheese until the total amounts to the losses from US tariffs.
  • The EU has announced it will also impose retaliatory measures, but has yet to outline them.
  • Dow Jones Industrial Average finished down 1.0 percent amid investor fears of a trade war.

Retaliatory measures

In response, European Commission President Jean-Claude Juncker called the news  "unacceptable...protectionism, pure and simple," and promised to announce "counterbalancing" measures within hours.

Mexico was the first country hit by the tariffs to outline its response. 

Canada then announced that it would impose duties on US steel and aluminum after Prime Minister Justin Trudeau called the US rules "totally unacceptable."

"These tariffs are an affront to the longstanding security partnership between Canada and the United States, and in particular, an affront to the thousands of Canadians who have fought and died alongside their American brothers in arms," Trudeau said, referencing Trump's claims that national security influenced his decision.

Read more: Germany, the US and non-free trade

The Canadian tariffs will also be 25 percent for steel and 10 percent for aluminum.

The European Union said later on Thursday that it would bring its case against the tariffs to the World Trade Organization on Friday, joining India and China in triggering the WTO's dispute settlement procedure over the American trade rules.

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Talks prove futile

President Trump had imposed the tariffs in March, a policy that was thought to be largely aimed at China. Soon afterwards, the White House chose to exempt several countries temporarily and negotiate with each one to obtain concessions in return for a more permanent exemption.

The EU was under this exemption and had been negotiating with the Trump administration, but the exemption is set to expire on Friday

Read more: Donald Trump's EU trade dilemma: United against China or alone against the world? 

Top European officials had gathered in Paris with US trade officials on Wednesday for a last-ditch effort to avoid the tariffs, but a solution appeared far from reach. Ross said that they had "made some progress," but not enough to warrant a new exemption.

German FM Maas on US tariffs: 'We don't think it's legal'

Widespread backlash

The EU has vowed to retaliate, by suggesting it would impose tariffs on American products in return. Among the goods that the EU could target are Harley-Davidson motorbikes, blue jeans, bourbon whiskey, orange juice and peanut butter.

In a joint statement, EU Trade Commissioner Cecilia Malmström and Japanese Economy Minister Hiroshige Seko said the tariffs would "cause serious turmoil in the global market and could lead to the demise of the multilateral trading system."

Read more: Opinion: EU should not play Trump's customs games

German Chancellor Angela Merkel warned that the move from Washington would trigger an "escalation spiral" that could seriously harm world trade.

"We consider this unilateral measure to be unlawful, [Trump's] stated national security concerns do not hold any water," she said.

The tariffs were even criticized by Trump's own party. US Representative Kevin Brady, the chairman of the Ways and Means Committee, said "When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem, China is."

"These tariffs are hitting the wrong target."

US President Donald TRump showing off the tariff proclamation
Surrounded by steel workers, US President Donald Trump signed a proclamation in March, establishing tariffs on steel and aluminum importsImage: Reuters/Leah Millis

ls,jcg,es/rc (AP, AFP, dpa, Reuters)

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