Backlash from allies, business associations over steel and aluminum tariffs

Leroy Wright
June 2, 2018

The tariffs on steel and aluminum imports from Mexico, Canada and the European Union (EU), which had been granted a temporary exemption after they were announced two months ago, have now sparked fears of a full-scale trade war.

Trump tweeted this morning: "Canada has treated our Agricultural business and Farmers very poorly for a very long period of time".

On Thursday, Trudeau hit back at punishing United States tariffs on steel and aluminum with Can$16.6 billion (US$12.8 billion) in duties on U.S. goods, and accused American President Donald Trump of lacking "common sense".

Hundreds of millions more is expected to be deposited in 2018 as well.

But Dr Fox warned against a "tit-for-tat" escalation in the light of European Union counter measures, adding: "There can be no victors in a trade war, only casualties".

Per the Washington Post, Trump has said that the tariffs are necessary for USA protection, though they have been criticized by groups as disparate as foreign leaders, American business leaders, and American labor organizations.

Trump this week enacted his administration's most severe economic penalties against USA allies to date, establishing tariffs on steel and aluminum imports from Canada, Mexico and the European Union.

"This is a bad day for world trade", European Commission president Jean-Claude Junker declared. "Our absolute view is - this is absurd to think that Canada could in any way be a national security risk to the United States".

'And other countries understand, you know, when I talk to them they look at me - and this is in closed doors, not for you people, and they essentially say, 'We can't believe we've gotten away with this for so long.' It's like you guys can't believe you've gotten away with it for so long, ' the president said.

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Ottawa would impose $12.8 billion worth of retaliatory tariffs on US goods such as steel and aluminum as well as consumer goods like maple syrup, pizza, and toilet paper, according to a list published by Canada's Department of Finance. We of course have the G7 leaders meeting at the end of the week where the Prime Minister will be raising this with President Trump alongside other leaders.

On Friday, Mexico vowed to retaliate with penalties on American products like flat steel, lamps, pork legs and shoulders, sausages, apples, grapes, blueberries and some kinds of cheese. EU Trade Commissioner Cecilia Malmstrom said the bloc won't even discuss the issue until the United States stands down.

The remarks came as U.S. President Donald Trump lobbed another Twitter salvo at Canada early Friday.

"I did exactly what I said I would do, which is express in strong terms our opposition to these tariffs on the steel and aluminum sector", Morneau told reporters.

Now, both of those men have left the White House, and Trump has gravitated instead toward seeking the counsel of trade hardliners like Commerce Secretary Wilbur Ross, senior adviser Peter Navarro, and U.S. Trade Representative Robert Lighthizer.

A 25 per cent tariff on steel imports and 10 per cent tariff on aluminium imports would be imposed on the EU, Canada and Mexico starting at midnight local time, Ross told reporters. Canada's planned retaliatory measures will take effect July 1 and stay in place until the US backs down.

South Korea, Argentina, Australia, and Brazil have all signed separate trade deals with the United States, and will be exempt from all or part of the tariffs.

Malmstrom said over-production from China, not Europe, was to blame for the glut of steel that prompted the US action.

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