White House delays tariffs on EU, Canada and Mexico
The White House said Monday it would postpone a decision on imposing tariffs on U.S. imports of steel and aluminum from the European Union, Canada and Mexico for 30 days, avoiding the potential for a trade battle with Europe as the U.S. prepares for tense trade talks in China this week.
The Trump administration said it had reached an agreement with South Korea on steel imports after discussions on a revised trade agreement, the outlines of which were previously announced by U.S. and South Korean officials. And the administration said it had also reached agreements in principle with Argentina, Australia and Brazil on steel and aluminum that will be finalized shortly.
Announcing the trade actions, the White House said “in all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment and protect the national security.”
Facing a self-imposed deadline, President Donald Trump was considering whether to permanently exempt the EU and Mexico, Canada, Australia, Argentina and Brazil from tariffs that his administration imposed last month on imported steel and aluminum. The White House provided temporary exemptions in March and had until the end of Monday to decide whether to extend them.
The EU has said if it loses its exemption it will retaliate with its own tariffs on U.S. goods imported to Europe.
The confrontation stems from the president’s decision in March to slap tariffs of 25 percent on imported steel and 10 percent on imported aluminum. Trump justified the action by saying it was needed to protect American metal producers from unfair competition and bolster national security. But the announcement, which followed an intense internal White House debate, triggered harsh criticism from Democrats and some Republicans and roiled financial markets.
At the time, Trump excluded several vital trading partners – the European Union, Mexico, Canada, Australia, Argentina and Brazil – from the tariffs.
That meant the steel tariff covered just 30 percent of all imports, according to Oxford Economics. If all the exemptions were ended, it would have deepened the impact of the tariffs on American companies that use steel and potentially affect financial markets. Stock prices fell nearly 2 percent when the tariffs were announced.
Two people familiar with the process said the Trump administration had been considering whether to provide a short-term extension of the exemptions to allow for more time to review the countries’ efforts to secure permanent exemptions.