U.S. imposes steel, aluminum tariffs on EU, Canada, Mexico

Posted June 01, 2018

Canadian Prime Minister Justin Trudeau retaliated swiftly against metal tariffs announced by President Donald Trump, imposing levies on as much as C$16.6 billion ($12.8 billion) of US imports in what Canada calls its strongest trade action since the Second World War.

Ontario Premier Kathleen Wynne, campaigning in advance of the June 7 provincial election, savaged the US president as she called the tariff measure short-sighted and urged Trudeau "to take the strongest retaliation possible to protect our workers" and industry.

The three close US allies had been part of a small group of foreign governments that received temporary exemptions from the tariffs, until trade deals could be signed.

In imposing the tariffs, President Donald Trump invoked a seldom-used section of a 1960s trade law that allows him to erect trade barriers when imports imperil national security.

"Realistically, I do not think we can hope" to avoid either USA tariffs or quotas on steel and aluminum, said Cecilia Malmstrom, the European Union's trade commissioner. Nucor Corp., the biggest USA steel producer, rose 0.6 per cent to US$64.49.

The Mexican measures target pork legs, apples, grapes and cheeses as well as steel - products from USA heartland states that supported Trump in the 2016 election.

Canadian Prime Minister Justin Trudeau said the Trump administration's argument that the tariffs were necessary for national security reasons was an "affront" to Canada, which has fought alongside the U.S.in numerous armed conflicts.

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Trudeau is hosting this year's G-7 summit in early June and President Trump is expected to attend.

"Over the past months we have continuously engaged with the USA at all possible levels to jointly address the problem of overcapacity in the steel sector", says European Commission President Jean-Claude Juncker.

In a statement, European Commission President Jean-Claude Juncker said "this is protectionism, pure and simple".

Wilbur Ross, the commerce secretary, broke the news on a call with reporters Thursday morning.

He also imposed a 10 percent tariff on aluminum imports.

"Without a strong economy you can't have strong national security", Ross said.

But she says they could hit Canadian businesses, some of which say they are watching closely to see how the dispute unfolds.

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NAFTA negotiations are "taking longer than we had hoped".

Brazil, Argentina and Australia have agreed to limit steel shipments to the United States in exchange for being spared the tariffs, the Commerce Department said.

Ross offered little detail about what the EU, Canada and Mexico could do to have the tariffs lifted.

Stocks in the U.S. fell as the administration ignored the pleas from business lobbying groups including the U.S. Chamber of Commerce to forgo tariffs.

Worries about a U.S. trade war with the European Union weighed on Wall Street stocks at the open, but shares of USA steel and aluminum makers were up strongly.

"It's not everyone attacking the other and we see who remains standing at the end", he said, declaring that the stiff USA duties were "unjustified, unjustifiable and unsafe". "There is no longer a very precise date when they will be concluded", Ross said on Thursday.

Tata Steel, which employs 8,500 people across the United Kingdom, has called for "swift and robust action" in response to the steel tariffs.

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And he repeated that while he was looking forward to continuing negotiations, the US decision was based on national security grounds.