Published: Fri, June 01, 2018
Finance | By Gustavo Carr

Germany fears protectionist spiral as U.S. follows through with steel tariffs

Germany fears protectionist spiral as U.S. follows through with steel tariffs

Canadian Prime Minister Justin Trudeau (seen here with President Trump in October) on Thursday called the argument that USA steel import tariffs were necessary for national security reasons an "affront" to Canada.

"The European Union measures will be reasonable, proportionate and in full compliance with WTO rules and obligations", Federica Mogherini, the E.U.'s foreign policy chief, told reporters Friday morning. The US now leaves us with no choice but to proceed with a WTO dispute settlement case and with the imposition of additional duties on a number of imports from the US.

The EU, Canada and Mexico learned yesterday that they will not be exempted from the decision of US President Donald Trump to slap tariffs of up to 25 per cent on metal imports.

"We must ensure our markets are not destabilised by millions of tonnes of steel being diverted away from the USA and into Europe", Henrik Adam, chief commercial officer of Tata Steel in Europe, said in a statement.

Canadian officials "must open their markets and take down their trade barriers", he said. Germany, meanwhile, would continue to stand up for free trade around the world, he said.

Ross himself heads to Beijing on Friday where he will attempt to get firm deals to export more United States goods in a bid to cut America's US$375 billion (S$502 billion) trade deficit with China.

It's a bad day for world trade.

Henrar said the US would mainly hurt itself by imposing tariffs on European steel, as American manufacturers often have no alternative supplier.

Canada, Mexico and the European Union had been granted temporary exemptions from those tariffs while the United States pursued negotiations to address the administration's concerns about the state of domestic steel and aluminum production. It believes the new tariffs are in clear breach of WTO rules and rejects United States claims that they are necessary on national security grounds.

More news: Tropical cyclone Mekunu unlikely to reach UAE

Liam Fox has condemned Donald Trump's steel and aluminium tariffs as "patently absurd" but has insisted the President's "protectionism" and apparent disregard for the United Kingdom economy will not affect a post-Brexit trade deal.

And he said that while he was looking forward to continuing negotiations, the making its decision in the interest of national security - a justification Foreign Affairs Minister Chrystia Freeland has dismissed as absurd.

The measures had actually been decided back in March, but at the time US President Donald Trump gave Canada and the European Union - the biggest sources of foreign aluminium and steel, respectively for the US - a grace period until May 31. Emmanuel Macron spoke to Donald Trump on the phone on Thursday evening and called the American decision "illegal", the Elysee Palace said.

"As to Canada, Mexico, you will recall that the reason for the deferral had been pending the outcome of the NAFTA talks", he said.

Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto spoke by phone following the US announcement.

The US will place quotas or volume limits on steel and aluminium from Australia and Argentina.

"It's a very worrying situation, I would not use the words "trade war" because it has a psychological effect".

Mexico will target the USA agricultural sector for tariffs. "We will not be blackmailed, and we will not negotiate with a gun to our heads", she said.

Like this: