US slaps steel and aluminum tariffs on the EU

Officials from both sides of the Atlantic were unable to reach a deal to avert tariffs two days before the exemption expires. The EU has said it will announce retaliatory measures shortly.

US Commerce Secretary Wilbur Ross told reporters on Thursday that a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the EU, Canada and Mexico would indeed go into effect at midnight after those countries were unable to make a deal with the US ahead of a Friday deadline. 

"We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved," Ross said.

  • Germany and France condemned US President Donald Trump's plan to impose tariffs, saying both countries are working closely to develop countermeasures.
  • Canada announced retaliatory duties on beef, coffee, candies, plywood and maple syrup, alongside steel and aluminum, amounting to $12.8 billion (€10.9 billion).
  • Mexico said it would impose penalties on steel sheets, lamps, pork leg and shoulder, sausages, apples, grapes and different types of cheese until the total amounts to the losses from US tariffs.
  • The EU has announced it will also impose retaliatory measures, but has yet to outline them.
  • Dow Jones Industrial Average finished down 1.0 percent amid investor fears of a trade war.
Donald Trump: deal-breaker abroad and at home

Iran nuclear deal

The "worst deal ever": That's how Donald Trump described the 2015 landmark agreement that lifted international sanctions against Iran in exchange for the country dismantling its atomic program. In May 2018 the president followed through on a campaign promise and said he would withdraw the US from the deal, which had arisen out of painstaking multi-year negotiations.

Donald Trump: deal-breaker abroad and at home

Trans-Pacific Partnership

In February 2016 then-US President Barack Obama signed the free trade agreement known as the TPP along with 11 other Pacific nations. However, it never went into effect: Shortly after taking office, Trump signed an executive order that took the US out of the deal, thus keeping it from entering into force. The scuttled TPP evolved into a new regional trade partnership — without the US.

Donald Trump: deal-breaker abroad and at home

Paris Agreement

The Paris climate accord was adopted in December 2015 after the COP 21 meeting. All 195 participating member states and the EU agreed to reduce emissions, decrease carbon output and try to rein in global warming. The US signed the accord but support was short-lived: in November 2017 Trump told the UN that the US would withdrawal from the accord at the earliest possible date, November 2019.

Donald Trump: deal-breaker abroad and at home

Domestic environmental regulations

Trump not only has undone US participation in international climate deals but also has scrapped domestic environmental regulations. Scott Pruit, Trump's head of the Environmental Protection Agency, announced in March 2018 that Obama-era vehicle emissions standards would be rolled back. And at the very start of his term, Trump also said he would review the Clean Water Act and Clean Power Plan.

Donald Trump: deal-breaker abroad and at home

Affordable Care Act

The ACA, nicknamed "Obamacare," was landmark legislation that roughly halved the number of medically uninsured Americans through program expansion and insurance mandates. Its critics, Trump among them, described it as federal government overreach that would cause skyrocketing health costs for individuals. While total repeal has failed, Republicans did do away with the mandate in 2017 tax reform.

Retaliatory measures

In response, European Commission President Jean-Claude Juncker called the news  "unacceptable...protectionism, pure and simple," and promised to announce "counterbalancing" measures within hours.

Mexico was the first country hit by the tariffs to outline its response. 

Canada then announced that it would impose duties on US steel and aluminum after Prime Minister Justin Trudeau called the US rules "totally unacceptable."

"These tariffs are an affront to the longstanding security partnership between Canada and the United States, and in particular, an affront to the thousands of Canadians who have fought and died alongside their American brothers in arms," Trudeau said, referencing Trump's claims that national security influenced his decision.

Read more: Germany, the US and non-free trade

The Canadian tariffs will also be 25 percent for steel and 10 percent for aluminum.

The European Union said later on Thursday that it would bring its case against the tariffs to the World Trade Organization on Friday, joining India and China in triggering the WTO's dispute settlement procedure over the American trade rules.

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Talks prove futile

President Trump had imposed the tariffs in March, a policy that was thought to be largely aimed at China. Soon afterwards, the White House chose to exempt several countries temporarily and negotiate with each one to obtain concessions in return for a more permanent exemption.

The EU was under this exemption and had been negotiating with the Trump administration, but the exemption is set to expire on Friday

Read more: Donald Trump's EU trade dilemma: United against China or alone against the world? 

Top European officials had gathered in Paris with US trade officials on Wednesday for a last-ditch effort to avoid the tariffs, but a solution appeared far from reach. Ross said that they had "made some progress," but not enough to warrant a new exemption.

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Germany on tariffs: 'We don't think it's legal'

Widespread backlash

The EU has vowed to retaliate, by suggesting it would impose tariffs on American products in return. Among the goods that the EU could target are Harley-Davidson motorbikes, blue jeans, bourbon whiskey, orange juice and peanut butter.

In a joint statement, EU Trade Commissioner Cecilia Malmström and Japanese Economy Minister Hiroshige Seko said the tariffs would "cause serious turmoil in the global market and could lead to the demise of the multilateral trading system."

Read more: Opinion: EU should not play Trump's customs games

German Chancellor Angela Merkel warned that the move from Washington would trigger an "escalation spiral" that could seriously harm world trade.

"We consider this unilateral measure to be unlawful, [Trump's] stated national security concerns do not hold any water," she said.

The tariffs were even criticized by Trump's own party. US Representative Kevin Brady, the chairman of the Ways and Means Committee, said "When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem, China is."

"These tariffs are hitting the wrong target."

Surrounded by steel workers, US President Donald Trump signed a proclamation in March, establishing tariffs on steel and aluminum imports

ls,jcg,es/rc (AP, AFP, dpa, Reuters)

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