The U.S. will impose tariffs on steel and aluminum imports from Canada, Mexico and
the European Union starting on Friday, the Trump administration said, raising
the specter of trade war with some of Washington’s closest allies, who said
they would retaliate.
Canadian Prime Minister Justin Trudeau on Thursday said Ottawa will
impose billions of dollars of tariffs on steel, aluminum and a wide range of
other U.S. goods, including some food and agricultural products. Canada said it
would hold consultations for two weeks before imposing the tariffs on July 1,
which would remain until the U.S. levies are removed.
Mr. Trudeau said the fallout from its moves would be “more significant”
than it realizes.
The EU said it is also planning to hit back with billions of dollars of
levies on U.S. exports which could go into effect staring June 20 and launch a
case against American measures at the World Trade Organization on Friday.
“This is protectionism, pure and simple,” the EU’s top executive,
European Commission President Jean-Claude Juncker, said Thursday. “We will
defend the Union’s interests, in full compliance with international trade law.”
Mexico’s Economy Ministry said it would target several U.S. goods in
response, including some steel and pipe products, lamps, berries, grapes,
apples, cold cuts, pork chops and various cheese products “up to an amount
comparable to the level of damage” linked to the U.S. tariffs.
The tariffs make good on Mr. Trump’s threats and show the administration
is maximizing pressure to win concessions from allies. Commerce Secretary
Wilbur Ross said that starting on Friday, the U.S. will impose a 25% levy on
steel and 10% on aluminum from Canada, Mexico and the European Union, the same
tariffs most other nations face in the U.S.
Since Mr. Trump announced unilateral, global steel and aluminum tariffs
in March, Canada, Mexico and the European Union, which includes the U.K., had
been offered temporary exemptions to the duties. All three economies received
an extension a month ago. But on Thursday Mr. Ross told reporters the
exemptions won’t be renewed.
What the U.S.-China Trade War Means for Workers on the Ground
Trade pressure on farmers has helped fuel the latest talks between U.S.
and China aimed at lifting tariffs on soybeans, hogs and more. Here, an
American farmer and a steelworker explain how tariffs are impacting their
“We continue to be quite willing and indeed eager to have further
discussions with all of those parties,” Mr. Ross said in a call from Paris.
Mr. Ross had worked with EU leaders in a failed effort to strike an
economic deal that would allow the bloc’s member states—including most members
of the North Atlantic Treaty Organization—to avoid tariffs.
The temporary exemptions were also issued while U.S. officials seek to
negotiate a new version of the North American Free Trade Agreement, or Nafta,
with Canada and Mexico.
“Those talks have been taking longer than we had hoped,” Mr. Ross said.
Mr. Trudeau also said he had offered to travel to Washington to meet
with Mr. Trump and finalize a deal on Nafta. He said he was told Canada would
need to agree to a sunset clause as a precondition to reaching a deal, a term
Mr. Trudeau said he wouldn’t accept.
The White House said Argentina, Australia and Brazil won’t be subjected
to the tariffs. South Korea had previously finalized an exemption that includes
a quota on steel.
Meanwhile, the Trump administration also is negotiating a high-stakes
trade conflict with China, seen as an economic competitor.
The U.S. administration is studying whether tariffs should be imposed on
imported cars and auto parts under the same law that gives Mr. Trump wide
authority to erect trade barriers under the banner of national security.
Mr. Trump, who has defended the use of tariffs to protect U.S. workers,
is betting that raising pressure on the EU and partners in Nafta will yield
agreements that help U.S. domestic industries.
The White House said the “steel and aluminum tariffs have already had
major, positive effects on steel and aluminum workers and jobs and will
continue to do so long into the future,” the White House said on Thursday.
Yet the policy risks higher prices on imports, painful retaliation
against U.S. exports and the possibility of a longer-term hit to relations with
allies if the Trump administration alienates politicians in allied democracies.
Canada said it would impose a 25% tariff on steel imports from the U.S.
and a 10% tariff on aluminum and the other products. The total value of the
imports on the list is 16.6 billion Canadian dollars ($12.9 billion), according
to the Canadian government, which says that amount represents the value in 2017
of Canadian exports that will be affected by the new U.S. levies.
Canada Foreign Minister Chrystia Freeland called the tariffs the
strongest retaliatory action Canada has taken since World War II. “This is a
very strong Canadian reaction in response to a very bad U.S. decision,” Ms.
The EU has prepared a list of U.S. exports worth €6.4 billion ($7.5
billion) that could be slapped with levies, up to €2.8 billion of which could
go into effect staring June 20.
Republican lawmakers were quick to voice their disapproval of the Trump
“This is dumb,” said Sen. Ben Sasse, a Nebraska Republican. “Europe,
Canada, and Mexico are not China, and you don’t treat allies the same way you
Sen. Orrin Hatch, chairman of the Senate Finance Committee, said:
“Tariffs on steel and aluminum imports are a tax hike on Americans and will
have damaging consequences for consumers, manufacturers and workers. I will
continue to push the administration to change course.”
U.S. allies were also unsparing.
A spokesperson for the U.K. government, said, “We are deeply
disappointed that the U.S. has decided to apply tariffs to steel and aluminum
imports from the EU on national security grounds.”
Much of the U.S. steel industry and the United Steelworkers union have
opposed steel tariffs on Canada, so the Trump administration will face strong
lobbying to cancel the duties on steel and aluminum from affecting steel
produced in North America.
The countries hit by tariffs include some of closest U.S. allies and
trading partners, and biggest suppliers of metals.
Canada accounts for about half of the raw aluminum imported by the U.S.
and about 21% of the finished steel imports by the U.S. It’s a major provider
of steel plate and hot-rolled coil steel used widely throughout manufacturing.
Mexico supplies 9% of finished steel imports, but also provides 11% of
semi-finished steel. These are generally big slabs of steel that U.S. mills buy
to make finished products like sheet steel and pipe.
EU countries provide 17% of the steel imported by the U.S., according to
Jefferies. The EU is a major supplier of stainless steel, high-value steel used
by the automotive industry.
Canadian officials made a last-ditch effort this week to get the
exemption extended: Ms. Freeland visited U.S. Trade Representative Robert
Lighthizer to plead Ottawa’s case, and the government in Ottawa issued a new
policy late Wednesday to prevent the dumping of cheap foreign steel into North
Mr. Trudeau said it was “absurd” to believe Canadian steel and aluminum
posed a security threat, given that those products are used to help build U.S.
fighter jets and armored vehicles. He added he Mr. Trump “how difficult the
[tariffs] was going to be in terms of a turning point in U.S.-Canada relations.”
Mr. Ross, who is leading the reviews of steel, aluminum and
auto-industry imports, said countries aren’t being singled out as
national-security threats but instead evaluated through a broader economic
“The question is what is the overall impact of the overall global supply
situation in steel and aluminum, relatively to those industries, relative to
national defense, and relative to the national economy,” he said.
The Trump administration says the national-security justification for
the tariffs means they are in accordance with U.S. law and a special security
exception at the WTO. Mr. Ross said the administration, led by Agriculture
Secretary Sonny Perdue, are looking at ways to support farmers hurt by any
retaliatory duties or quotas.
Mr. Trump has warned he may respond to retaliatory tariffs with barriers
against European cars.
“I think it’s important for countries to retaliate,” said Luis de la
Calle, a former Mexican official who was part of the original Nafta negotiating
team. “If we don’t do it now, it’s only going to get worse with possible car
Click here for the original article from The Wall Street