Trump imposes steel and aluminum tariffs on the EU, Canada and Mexico
President Trump waves before boarding Air Force One to depart for travel to Texas from Joint Base Andrews in Maryland on May 31. (Leah Millis/Reuters) May 31 at 2:32 PM Email the author
President Trump on Thursday imposed tariffs on imported steel and aluminum from the European Union, Canada and Mexico, triggering immediate retaliation from U.S. allies and protests from American businesses and farmers.
The tariffs â" 25 percent on steel and 10 percent on aluminum â" take effect at midnight Thursday, marking a major escalation of the trade war between the United States and its top trading partners.
Stung by the U.S. action, the allies quickly hit back. The E.U. said it would impose impo rt taxes on politically sensitive items like bourbon from Senate Majority Leader Mitch McConnellâs home state of Kentucky. Mexico said it would levy tariffs on American farm products, while Canada zeroed in on the same metals that Trump had targeted.
Capping the extraordinary day, Canadian Prime Minister Justin Trudeau revealed that he had rejected an ultimatum from Vice President Pence that any new North American trade deal be renewed at five-year intervals.
âToday is a day when the Trump administration pretty much signaled it is throwing out the rule book on trade,â said Rufus Yerxa, head of the National Foreign Trade Council and a former U.S. negotiator. âIâve been dealing with this stuff for four decades and Iâve never seen anything like this.â
After 17 months in the White House, Trumpâs âAmerica Firstâ program has landed the United States in increasingly bitter standoffs with customers and suppliers that account for nearly two-thirds of the nationâs $3.9 trillion annual merchandise trade.
Businesses granted government protection, such as the steel industry, have added jobs at blast furnaces in Illinois and mills in Ohio. But chemical manufacturers, brewers, footwear makers and auto companies have warned that Trumpâs tariffs will cost several jobs elsewhere in the economy for each job saved or created in a metals producer.
Thursdayâs action was driven by the presidentâs conviction that allies and adversaries routinely take advantage of the United States and that efforts to resolve trade disputes are doomed unless he wields a big tariff stick.
âThe United States has been taken advantage of for many decades on trade,â Trump said in a statement. âThose days are over. Earlier today, this message was conveyed to Prime Minister Justin Trudeau of Canada: The United State[s] will agree to a fair deal, or there will be no deal at all.â
Recent talks with the three U.S. tra ding partners made insufficient progress for him to resist his inclination to order new import taxes. âHe is impatient. He wants to see action,â said one senior administration official, who spoke on the condition of anonymity to describe internal discussions.
To recover lost factories and manufacturing jobs, Trump has embraced tariffs with an enthusiasm not seen since the 19th century. The Commerce Department boasts that it has launched 78 percent more trade enforcement investigations than during the Obama administration. The president has levied tariffs on solar panels and washing machines, threatened to impose them on Chinese imports and foreign-made cars, and now treated some of Americaâs closest friends as economic enemies.
âItâs more than highly unusual. Itâs unprecedented to have gone after so many U.S. allies and trading partners, alienating them and forcing them to retaliate,â said economist Douglas Irwin, author of a history of U.S. trade policy since 1763. âItâs hard to see how the U.S. is going to come out well from this whole exercise.â
White House advisers have warned the president that he risks damaging U.S. businesses, farmers and the stock market. âYou say to him how bad itâs going to be, and he responds, âWeâre already getting screwed. What are we supposed to do, sit here and beg for them to leave us alone?ââ said one adviser, who spoke on the condition of anonymity to discuss internal deliberations.
In response to Thursdayâs announcement, the E.U. said it will impose duties âon a number of imports from the United States,â referring to a 10-page list of targets for retaliation it published in March, which included bourbon and Harley-Davidson motorcycles. European leaders also vowed to proceed with a complaint to the World Trade Organization.
âThis is protectionism, pure and simple,â said Jean-Claude Juncker, president of the European Commission.
The Mex ican government said it would levy import taxes on U.S. exports of pork bellies, apples, cranberries, grapes, certain cheeses and various types of steel.
And Canada slapped a surtax on $12.8 billion of American steel, aluminum, coffee, candy, pizza and quiche, as Trudeau pronounced Trumpâs claim to be protecting national security an âaffrontâ to Canadians who fought alongside American GIs from World War II to Afghanistan.
The root of the current trade mess lies in a surplus of global steel, which most analysts blame on excess Chinese investment in production facilities. Steelmakers worldwide produce 700 million tons of steel more than customers need, or seven times total U.S. production, the Commerce Department says.
That flood of steel has depressed prices, making it difficult for many American steelmakers to compete.
Last year, Commerce Secretary Wilbur Ross negotiated voluntary reductions in global capacity. But Trump rejected the deal.
Trump had announced the tariffs in March, but gave several U.S. allies temporary exemptions while they negotiated potential limits on shipments to the United States.
At the time, the nonpartisan Trade Partnership estimated that the tariffs would cost five jobs for every position saved in the steel and aluminum industries.
Ross said the president acted on national-security grounds, seeing a rising tide of imports as a threat to the domestic metals industry. âWithout a strong economy, you canât have a strong national security,â Ross said.
Officials from the three trading partners â" among Washingtonâs closest allies for decades â" have dismissed the idea that their shipments to American customers endanger the United States â" and some prominent Republicans attacked the tariffs as wrongheaded.
âThis is dumb. Europe, Canada and Mexico are not China, and you donât treat allies the same way you treat opponents,â Sen. Ben Sasse (R-Neb.) said. âWeâve been down this road before â" blanket protectionism is a big part of why America had a Great Depression. âMake America Great Againâ shouldnât mean âMake America 1929 Again.âââ
The United States negotiated voluntary export limits with several other friendly nations, including South Korea, Argentina, Australia and Brazil. Ross said that he intends to continue talks with European diplomats and officials from Canada and Mexico, but those are likely to be contentious.
âWe continue to be quite willing, indeed eager, to have further discussions with all of these parties,â Ross told reporters, speaking from Paris, where he is attending meetings at the Organization for Economic Cooperation and Development.
The new tariffs will do nothing to improve prospects for a new North American trade deal.with Mexico and Canada. Trudeau said that he had offered to visit Washington to make a last-ditch bid for a deal that would have prevented the tariffs from taking effect.
But on Tuesday, Pence told him that Trudeau first had to agree that any new North American trade deal would lapse every five years unless formally renewed. The U.S. demand for such a âsunset clauseâ has long been unacceptable to its negotiating partners, so Trudeau refused.
âThe chances of a NAFTA renegotiation were slim, and now they are slimmer because of this,â said Luis de la Calle, a former undersecretary at Mexicoâs ministry of economy. âSuccessful negotiations require trust, and the question is whether we can trust the U.S. The answer appears to be no.â
Thursdayâs action also is expected to complicate U.S. efforts to confront China over trade practices that the administration regards as unfair. The E.U. shares many of Washingtonâs concerns about Chinaâs efforts to acquire advanced technology through compulsory licensing practices, cybertheft and other measures.
But European officials are increasingly irrita ted by Trumpâs aggressive use of obscure provisions in U.S. trade laws against U.S. allies.
Liam Fox, the United Kingdomâs secretary of state for trade, told Sky News that the presidentâs invocation of national security to justify protection for metals producers was âpatently absurd.â
The administration earlier in May opened a trade investigation into vehicle imports, with the possibility it will end in tariffs on foreign cars justified by the same ânational securityâ provision used to implement the metals tariffs.
Even before Trumpâs latest action, the U.S. enforced 169 anti-dumping or counter-subsidy tariffs on various steel products.
âOur members could face having to pay double tariffs on some materials necessary to manufacture parts in the US,â said a statement from the Motor & Equipment Manufacturers Association. âIndustries like ours, which require long-term investments in facilities and employees, depend on regulatory a nd market stability. These actions have thrown all of that up in the air.â
Ross, meanwhile, said that he still plans to leave for China on Friday for the resumption of trade talks. Earlier this week, there were reports that the talks might be canceled following Trumpâs renewed threat to impose import taxes on $50 billion in Chinese products.
James McAuley in Paris, Griff Witte in Berlin, Alan Freeman in Ottawa and Kevin Sieff in Mexico City contributed to this report.Source: Google News