In March 2018 when the Trump government announced steep tariffs of 25% and 10% on steel and aluminum imports, it temporarily exempted seven of its trade allies including Canada, Mexico, EU (European Union), South Korea, Brazil, Argentina, and Australia till 1 May 2018.
However, yesterday on 1 May, the U.S. president announced that the imposition of tariffs on EU, Mexico, and Canada will be further delayed by a month till 1 June 2018 till the deals are finalized with these countries with further talks.
In case of other three allies, Argentina, Brazil, and Australia the Trump administration has reached preliminary agreements allowing them to escape duties as the details of the agreement gets finalised over the next 30 days.
The White House in Mar’18 spared South Korea from the duties after Seoul accepted a quota of 70% of the average of its steel exports to the U.S. in last three years. U.S. confirmed this on Monday (30 Apr’18) that South Korea was granted a permanent exemption in a presidential proclamation.
Only a temporary breather, quotas likely to be imposed
The Trump administration is focused on quotas for all the countries that will restrain imports, prevent trans-shipment, and protect the national security. These agreements underscore the Trump administration’s successful strategy to reach fair outcomes with allies to protect our national security and address global challenges to the steel and aluminum industries.” the White House said.
The president’s decision to delay the tariffs is a breather for few but is also a new deadline for allies who have been scrambling to secure permanent refuge from the metals duties. It could be seen as a gesture of goodwill for Canadian and Mexican negotiators who are in talks with the U.S. to revise the NAFTA (North American Free Trade Agreement).
However, this delay and not a permanent exemption of tariffs has prolonged the standoff with the largest trading bloc EU. European officials have said the U.S. tariffs violate international trading rules, and they have threatened to retaliate with levies on iconic American brands such as Harley Davidson motorcycles and Kentucky bourbon.
“The US decision prolongs market uncertainty, which is already affecting business decisions,” the European Commission said in a statement.
No respite for Taiwan
This decision of 30-days extension for only its key trade allies is also indicative of the fact that there is no exemption for Taiwan which has launched anti-dumping and anti-subsidy investigation in Apr’18 into select products sold by Chinese firms in an effort to win exemption from U.S. tariffs which is Taiwan’s one of the top stainless steel export destinations.
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