Trump threatens Europe with more tariffs

Wednesday, 14 Mar, 2018

It recognized the complex, integrated economies of all three trade partners in the North American Free Trade Agreement (NAFTA), and the damage a 25% import tariff on steel and 10% tariff on aluminum imports into the US would cause all three nations. But will the congressmen's talk be followed by action to undo the order the president signed on Thursday afternoon?

Treasury Secretary Steve Mnuchin told CNBC in an interview Friday that the president will consider national security in determining exemptions from tariffs, and noted that Trump wants to be sure that North Atlantic Treaty Organisation gets more funding from European allies.

"We are definitely going to end up with these tariffs, and we're going to roll this out very, very quickly", Mnuchin told Fox Business.

However, most GOP lawmakers have balked at Trump's approach, which includes exemptions for Mexico and Canada and the opportunity for other countries to appeal for a similar reprieve.

He has also left open the possibility of later excluding allies such as Australia.

China led a group of 18 World Trade Organization members on Wednesday that urged US President Donald Trump to scrap his planned tariffs on steel and aluminium. The first mechanism is the ability of certain countries, with which the US have security relationships, to be exempted completely as long as they can assure the US Administration that there are "alternative ways to address the threatened impairment of the national security caused by imports from that country". These determinations will be made on a case-by case basis by the Secretary of Commerce in consultation with the Secretaries of State, Treasury and Defense and with the USTR, and other executive branch officials. The decision cost Mr Trump his top economic adviser, Gary Cohn, whose free trade views clashed with the protectionist move.

Higher inflation resulting from tariffs and follow-up actions could also push central bankers to raise interest rates at a faster pace. "Increased costs will make our industry less competitive and harm American workers, consumers, and our economy".

Ginn said that doesn't explain why the tariffs apply to everyone.

The U.N. says Secretary-General Antonio Guterres (goo-TEHR'-esh) is "encouraged" by the announcement of an upcoming U.S.

"Of course this will have to go through the usual litigation process, either the WTO or the courts to see how this works", Cornyn said at an energy conference in Houston.

Countries could challenge Trump's action in the World Trade Organization, putting this global forum in the uncomfortable position of determining what is in the "essential security interests" of the US, in accordance with an existing agreement on tariffs and trade.

He was genuinely glad at the U.S. leader's posture on trade, proud that the horse he had backed was coming through on the things that matter to him.

"The loss of exports to the USA, combined with an expected massive import surge in the European Union, could cost tens of thousands of jobs in the European Union steel industry and related sectors", said Axel Eggert, head of steel association EUROFER.

"The trade deficits have been too high". Some experts worry the move could even give the president a reason to take the USA out of the trade group. Evraz said steel rolling mills, including its Portland site, "rely on annual imports of approximately 6 million tons of slab to bridge the shortfall in domestic slab production capacity".

If other nations can use tariffs to protect their economies and workers, then surely America has a right to do the same.

With Japan a major trade partner and global investor, Suga said that, on the contrary, they contributed greatly to employment and industry in the United States. It was the Chinese government's most forcible response yet to the new tariffs.

One of his sales team mused that there was a "little bit of worry" about unintended effects on other areas of the economy, and hoped there would not be a trade war.

One steel trading source in Canada said American customers, both warehouses and steel users, had been buying up Canadian metal in the spot market, because of the threat of a tariff, but supply was limited.