U.S. government will be imposing tariffs on steel and aluminium imports into the country on its allies after a two-month exemption did not result in any concrete policy changes. The tariffs will be levied on steel and aluminium products coming in from Canada, Mexico and the European Union.
U.S. President Donald Trump had announced worldwide steel and aluminum tariffs in March but had granted exemptions to some major trading partners.
Commerce Secretary Wilbur Ross told reporters on a telephone briefing on Thursday that a 25 percent tariff on steel imports and a 10 percent tariff on aluminium imports from the EU, Canada and Mexico would go into effect at midnight (04:00 GMT) on Friday. "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," he said.
Ross told reporters that talks with Canada and Mexico over revising the North American Free Trade Agreement (NAFTA) were "taking longer than we had hoped."
European Commission President Jean Claude-Juncker responded to the Trump Administration’s announcement, saying the EU will impose countermeasures on the U.S. "This is a bad day for world trade," Juncker said in a speech in Brussels. "So, we will immediately introduce a settlement dispute with the WTO [World Trade Organisation] and will announce counterbalancing measures in the coming hours," he added.
"It is totally unacceptable that a country is imposing unilateral measures when it comes to world trade."
French President Emmanuel Macron who is supposed to be on extremely good terms with President Trump has scheduled a call regarding his decision. The French President released a statement that noted “(France) regrets the U.S. decision to confirm tariffs in steel and aluminum.” “This decision does not conform to the international law to which both the U.S. and Europe have subscribed. So it is illegal. That is why we will take measures and provide answers. This decision is not only illegal, it is a mistake on many points. It is a mistake because it responds to a worldwide unbalance that exists in the worst ways through fragmentations and economic nationalism.”
Meanwhile, the U.S.’s northern neighbour Canada has announced dollar-for-dollar tariffs of its own on everything from steel products to maple syrup which would be implemented from July 1. Foreign Affairs Minister Chrystia Freeland said Canada is hitting back with duties of up to $16.6 billion on some steel and aluminum products and other goods from the U.S. — including beer kegs, whisky, toilet paper and "hair lacquers." "This is the strongest trade action Canada has taken in the post-war era. This is a very strong response, it is a proportionate response, it is perfectly reciprocal," Freeland told reporters.
Mexico too responded swiftly with tariffs of its own on U.S. exports of pork bellies, grapes, apples and flat steel, the Associated Press reported.
The tariffs have surely started a trade war between the U.S. and its key partners and it would make for awkward conversation as they have been announced at the start of the G7 finance ministers' meeting in the Canadian city of Whistler, B.C. on Thursday June 1.