Trump Announces Trade Tariffs on Key Allies; EU Considers Legal Challenge

by: The Knowledge Group

June 05, 2018


As Bloomberg News reported on Canada’s retaliatory tariffs, Canadian Prime Minister Justin Trudeau admonished President Trump for the “totally unacceptable” 20% steel and 10% aluminum tariffs which will end tariff exemptions for Canada, Mexico and the European Union.

Canada buys more U.S. steel than any other nation, Trudeau said, calling the tariffs an affront. Tariffs will also impact Britain, whose steel industry sends about 7% of its exports to the United States.

European Commission president Jean-Claude Juncker wants the World Trade Organization to impose new duties on some U.S. imports.

Starting on July 1, Canada plans to impose tariffs on U.S. products worth about $13 billion on steel, food, and drink items. Mexico will impose similar retaliatory tariffs. Europe had already drawn up a list of U.S. products slated for new tariffs, including jeans, bourbon, and cranberries, after President Trump announced the planned metal tariffs in March. Since then, to avert tariffs, several nations placed limits on exporting metals to the United States. The EU, Canada, and Mexico, however, have yet to agree to Trump’s limits.

The Trump View, and Counterpoints

In the president’s view, cheap imports harm the United States. China, Trump’s main trade nemesis, has compromised to an extent, and so far managed to avoid a no-holds-barred trade war. In April, China imposed tariffs on $3 billion worth of U.S. items, including nuts and wines.

Perhaps the biggest concern with the trade-war approach is that higher international metal costs will ultimately affect the average person—and depress job markets involving U.S. factories that work with the restricted materials.

The U.S. Aluminum Association opposes the tariffs on key U.S. allies. The association suggests an alternative strategy, focused on negotiations with China to rectify its persistent overcapacity in aluminum manufacturing; targeted tariffs to confront Chinese overcapacity; and carefully considered penalties against nations with known histories of “duty evasion” in the metal sector.

What’s Next?

The EU’s new complaint with the WTO over Trump’s “illegal” tariffs sets a dispute settlement process into motion.

If agreement can’t be reached between the EU and Washington, the next step is “countermeasures” against the losing party.

We hope you can join us on June 26th for a webcast that covers the very latest on Trump’s Steel and Aluminium tariffs and their impacts, this webcast is eligible for Continuing Legal Education Credit (CLE), all of the information on how to register can be found by clicking here.