Published: Mon, June 04, 2018
Worldwide | By Victor Meyer

European Union plots counterstrike to American tariffs

European Union plots counterstrike to American tariffs

The Trump administration is planning to impose hefty tariffs on Canadian steel and aluminum imports as soon as Thursday - a move that threatens to spark a trade war and blow up already tense negotiations over the North American free-trade agreement.

And in another leg of Trump's multi-front trade offensive, Commerce Secretary Wilbur Ross arrived in Beijing to continue fraught talks with Chinese officials.

Wilbur Ross, the USA commerce secretary, said insufficient progress had been made in talks with the EU, Canada and Mexico, since the U.S. had agreed a temporary reprieve from the tariffs for the three close United States allies after they were unveiled by Trump two months ago.

U.S. President Donald Trump took to Twitter a day after imposing tariffs on steel and aluminum to call out Canada's softwood lumber industry, a sector that could provide insight for others on resilience in the face of U.S. tariffs.

No last-minute deal: Many officials in the European Union were banking on a last-minute breakthrough deal that would have either extended exemptions to the tariffs, which were first introduced for global steel and aluminum imports in late April, or introduced a permanent exclusion from the tariffs.

French Finance Minister Bruno Le Maire had said the tariffs would be "unjustified and dangerous".

That will be interpreted as another push for the European Union to settle the metal tariffs dispute through a new overarching trade deal with the US.

She noted that more than 8,500 jobs in the North Country are tied directly to U.S. It's not always easy to match a specific product to a specific tariff or to keep up with which products from which countries are facing, say, special anti-dumping duties.

The EU has stressed that its industry has also been damaged and offered to work with the USA to find a multilateral solution through the World Trade Organisation.

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These countermeasures consist of two lists of goods: one list that will be subject to a 25-per-cent tariff and a second list that will be subject to a 10-per-cent tariff. The measures will be in place until the USA government drops its tariffs, Mexico's government said. House Speaker Paul Ryan, who is not seeking re-election, said he disagrees with the decision.

"But we see no sign of that in this action today by the USA administration", he remarked.

The president took to Twitter on June 2 to defend his aggressive trade policies.

European Commission President Jean-Claude Juncker said "today is a bad world for trade", while affirming the EU would impose counterbalancing measures and start a case in the World Trade Organization.

Mr Trump originally imposed the tariffs in March, saying a reliance on imported metals threatened national security.

"In a connected, global economy, customs barriers don't benefit anyone, including the United States", the VDA federation said.

Freeland says the countermeasures, which apply to a long list of USA products from flat-rolled steel to playing cards and felt-tipped pens, will go into effect July 1.

"What we are concerned about is now the risk of an escalation, an escalation turning into further trade dispute and tit for tat measures, these aren't going to help anyone at all".

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