U.S. Impose Steel Tariffs on E.U., Canada and Mexico
President Trump announced that he is taking action to protect America’s national security from the effects of global oversupply of steel and aluminum. Following extensive discussions and a months-long process, the U.S. will impose tariffs on steel and aluminum imports from EU, Canada and Mexico. announced. The tariffs, 25% on imported steel and 10% on imported aluminum took effect on 1 June 2018, marking a major escalation of the trade war between the United States and its top trading partners.
According to the Commerce Secretary Wilbur Ross, the excessive level of steel and aluminum imports threatened to impair the national security because further closures of domestic production capacity would result in a situation where the United States would be unable to meet demand for national defense and critical infrastructure in a national emergency.
The United States is the world’s largest steel importer. In 2017, the U.S. imported 34.6 million metric tons (mmt) of steel, according to the Department of Commerce. The value of steel exported into the U.S. was just over $29 billion in 2017. Canada accounted for the largest share of U.S. steel imports in 2017, followed by Brazil, South Korea, Mexico, Russia and Turkey.
When the broad tariffs on steel and aluminum were first imposed in March, U.S.has temporarily excluded six countries, including Canada and Mexico, and European Union states from higher U.S. import duties on steel and aluminum. Since then, the U.S. reached deals with South Korea, Brazil, Australia and Argentina have agreed to put limits on the volume of metals they can ship to the U.S.
The EU, Canada and Mexico, which will face 25 percent tariffs on steel and 10 percent on aluminum, immediately announced plans to retaliate with their own tariffs against American products.
Jean-Claude Juncker, president of the European Commission, said:
The EU believes these unilateral US tariffs are unjustified and at odds with World Trade Organisation rules. This is protectionism, pure and simple. Over the past months we have continuously engaged with the US at all possible levels to jointly address the problem of overcapacity in the steel sector. Overcapacity remains at the heart of the problem and the EU is not the source of but on the contrary equally hurt by it. That is why we are determined to work towards structural solutions together with our partners.
We have also consistently indicated our openness to discussing ways to improve bilateral trade relations with the US but have made it clear that the EU will not negotiate under threat. By targeting those who are not responsible for overcapacities, the US is playing into the hands of those who are responsible for the problem. 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. We will defend the Union’s interests, in full compliance with international trade law..
Chrystia Freeland, Canada’s Minister of Foreign Affairs, said:
Canada views the U.S. trade restrictions imposed on Canadian steel and aluminum as absolutely unacceptable. It is entirely inappropriate to view any trade with Canada as a national security threat to the United States. On top of the retaliatory measures announced yesterday, the Government of Canada today requested WTO consultations with the United States regarding its imposition of punitive tariffs on imports of steel and aluminium from Canada, and more generally, on the United States’ improper use of national security pretexts for protectionist purposes.
These unilateral tariffs, imposed under a false pretext of safeguarding U.S. national security, are inconsistent with the United States’ international trade obligations and WTO rules. Canada will closely collaborate with the European Union, which also filed a WTO challenge, as well as with other like-minded countries, on opposing these tariffs. Canada is a safe and secure supplier of fairly traded steel and aluminum for U.S. defence and security.