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US slaps steel and aluminum tariffs on the EU

, May 31, 2018, 0 Comments

us-steeel-aluminum-tariffs-eu-marketexpress-inOfficials 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.

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.

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

Retaliatory measures

Mexico was the first country hit by the tariffs to announce its response. The country’s Economy Ministry said that it would put penalties on US products including steel sheets, lamps, pork leg and shoulder, sausages, apples, grapes and different types of cheese until the price comes to a total comparable to the losses that the US tariffs will cause in Mexico.

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.

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.

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.

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.”

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.”

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