Published: Fri, June 01, 2018
Worldwide | By Lisa Hogan

Tariffs: How Europe is punishing the US

Tariffs: How Europe is punishing the US

The Dow Jones Industrial Average lost 1 percent and the S&P 500 shed around 0.66 percent.

President Trump on Thursday slapped a 25 percent tariff on steel imports from the European Union, Canada and Mexico, moving to punish what he saw as unfair competition after leaders from the two regions were unable to convince him otherwise. But Ross said Thursday that those talks "are taking longer than we hoped".

Canada and Mexico, embroiled in talks with the United States to modernise the North American Free Trade Agreement (Nafta), responded swiftly and German Economy Minister Peter Altmaier said the European Union might team up with them.

Canada, the largest supplier of steel to the United States, will impose tariffs covering C$16.6 billion (S$17.1 billion) on imports from the United States, including whiskey, orange juice, steel, aluminum and other products, Canadian Foreign Minister Chrystia Freeland said.

The Canadian tariffs will be 25 percent on steel and 10 percent on aluminum, and aim to match USA penalties on a dollar-for-dollar basis based on export values, according to Foreign Affairs Minister Chrystia Freeland.

Late yesterday, Mr Trump issued a statement about the NAFTA negotiations, saying the days of the United States being taken advantage of on trade were over.

In Canada, Prime Minister Justin Trudeau said: 'These tariffs are totally unacceptable'.

"All we are trying to do here with the 232 tariffs is to provide our domestic industries an opportunity to earn a decent rate of return and invest in this country", he said.

Freeland says the dollar-for-dollar countermeasures, which apply to a long list of US products from flat-rolled steel to playing cards and felt-tipped pens, will go into effect July 1. "We believe in a fair trade regime from which everybody benefits".

US President Donald Trump simultaneously enraged his North American and European trade partners. "The fact that we took a tariff action does not mean there can not be a negotiation". The trade partners are all expected to retaliate in what is becoming a fast-developing global trade war.

Trump has said the tariffs were necessary in order to protect US national security, but they were widely criticized by foreign leaders, USA business groups, and even some labor groups as being ill-designed and potentially damaging to the USA economy.

Century Aluminum jumped 7.1 per cent, and Alcoa gained 3.6 per cent.

"The consequences of these 232 steel tariffs could be even worse for U.S. companies as the 2002 tariffs were not applied to Canada and Mexico".

But the impending arrival of "Brexit Day" makes the United Kingdom more vulnerable in a global trading atmosphere poisoned by insularity and mistrust, says Sean O'Grady in The Independent.

It could also place the United States in a trade dispute on more than one front. Macron pledged the riposte would be "firm" and "proportionate" and in line with World Trade Organization rules.

The Chamber's chief executive, Tom Donohue, warned in a memo to the group's board that the administration's positions on trade, including enacted and threatened tariffs on key USA allies, could have disastrous effects on the American job market, The Wall Street Journal reports.

And no matter what, American companies will still need to import steel and aluminum.

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