Specter of trade war after US tariffs on EU, Mexico, Canada


He says the talks are taking longer than the US had hoped.

President Donald Trump's administration imposed tariffs on steel and aluminum imports from the European Union, Canada, and Mexico Thursday, a move that could provoke retaliatory tariffs and inflame trans-Atlantic trade tensions.

Commerce Secretary Wilbur Ross said starting Friday, steel and aluminuim products from will be subject to the same tariffs as most other nations when imported into the USA.

The impact of tariff threats is being felt in the USA too, given the amount of steel Canada exports south of the border and the large quantity of other goods purchased from various states. Some observers say a G6-plus-one scenario is already shaping up, with Trump as the outlier.

The E.U. has promised to meet the American tariffs with retaliatory duties on a wide range of USA exports from politically sensitive regions - including bourbon made in Mitch McConnell's Kentucky and Harley-Davidson motorcycles manufactured in Paul Ryan's Wisconsin. The president first unveiled these trade measures in early March, but had initially provided exemptions to the European Union and America's northern and southern neighbors. Hurting US manufacturers even further, the countries hit by the tariffs will also tax imported US products. Though he is unaware of any cancelled plans for investments in Canada, "I haven't seen any major investments announced either", said Joe Galimberti, president of the Canadian Steel Producers Association.

The tariffs, which have prompted several challenges at the WTO, are aimed at allowing the USA steel and aluminum industries to increase their capacity utilization rates above 80 percent for the first time in years.

Steel and aluminum stocks surged initially, but pared gains.

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Ross said that Argentina, Australia and Brazil will continue to be exempt from the tariffs though there have been "limitations" implemented "on the volume [of steel and aluminum] they can ship to the U.S".

Earrlier in the day, Ross announced that Washington will start to impose a 25-percent tariff on steel imports and a 10-percent tariff on aluminum imports on the EU, Canada and Mexico at midnight tonight. "There is no longer a very precise date when they may be concluded and therefore they were added into the list of those who will bear tariffs". "This is protectionism, pure and simple".

Despite the EU's reticence to enter a trade war, Juncker said the decision could not go "without any kind of reaction".

"Let me be clear: These tariffs are totally unacceptable", Trudeau said.

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

European Union's trade commissioner Cecilia Malmstrom had a meeting scheduled with the US Trade Representative Robert Lighthizer in Paris on Thursday among other worldwide trade chiefs.

The steel and aluminum levies and auto-import probe could play well with Trump voters in Rust Belt states in the lead-up to congressional midterms in November.