Donald Trump grants temporary extension on steel tariffs for Australia

Marsha Scott
May 1, 2018

It's crunch time for trade relations between the United States and Europe. In the case of Canada and Mexico, Trump's administration tied both countries' tariff exemptions to the successful renegotiation of the North American Free Trade Agreement.

If the European Union is subject to tariffs on the 6.4 billion euros ($7.7 billion) of the metals it exports to the United States, it has said it will set its own duties on 2.8 billion euros of US exports of products from make-up to motorbikes.

Earlier in the day the EU made a last-ditch effort Monday to avoid the tariffs on European steel and aluminum. But the announcement, which followed an intense internal White House debate, triggered harsh criticism from Democrats and some Republicans and roiled financial markets.

In March, US President Donald Trump imposed worldwide tariffs of 25% on US imports of steel and 10% on aluminium.

In Malmstrom's latest telephone conversation with Ross, Malmstom rejected Ross' demand for a voluntarily limit of European Union steel and aluminum exports to the United States of 90 percent of the average 2016-17 level. Stock prices fell almost 2 percent when the tariffs were announced.

The White House has not yet confirmed any exemptions will be made permanent and leaders of the European Union stand "ready to react" if they do go into effect.

The European Union last week asked to join a case, starting with consultations, that was initiated by China at the World Trade Organization over the USA steel and aluminum tariffs.

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The U.S. Aluminum Association last week sent a letter asking Trump to grant exemptions to all "responsible" trade partners. Security relationships with the US have also been part of the criteria.

"The Prime Minister and other ministers have been relentless in our advocacy for Australia and we will continue to ensure that we receive that exemption", she told the ABC on Monday, adding that Australian steel exports helped create United States jobs by being processed on arrival. That will likely reduce steel shipments from those countries over time. Ross did not name the countries.

If unresolved, those countries could become subject to U.S. tariffs of 25 per cent on steel and 10 per cent on aluminium as previously announced in a move created to target China.

The U.S. had a $337 billion trade deficit in goods and services with China a year ago.

So far, South Korea is the only nation to be spared from the duties after reaching a deal to revise its bilateral free trade agreement with the US, which was already under way.

Asked about concerns over possible retaliatory measures by China, Mnuchin said: "It's not a worry of mine", adding that Trump was focused on "free and fair and reciprocal trade". She has insisted on a permanent exemption without conditions. Before the tariffs were introduced, French President Emmanuel Macron said that the bloc "won't talk about anything while there's a gun pointed at our head". The White House also wants China to agree to reduce its $375 billion goods trade surplus with the U.S. China, in response, said it will impose its own tariffs on American products. Trump has announced that an administration delegation led by Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and trade adviser Peter Navarro will visit Beijing for negotiations on Thursday and Friday this week.

"We're going to have very frank discussions", Mnuchin in an interview broadcast Monday on Fox Business.

Other reports by MaliBehiribAe

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