US tariffs: Steel and aluminium levies slapped on key allies


A worker at German steel manufacturer Salzgitter AG stands in front of a furnace at a plant in Salzgitter, Germany, March 1, 2018.


The EU has threatened “all necessary measures” in response

The US is to impose tariffs on steel and aluminium imports from allies in Europe and North America.

The US said a 25% tax on steel and 10% tax on aluminium from the EU, Mexico and Canada will start at midnight.

The move immediately triggered vows of retaliation from Mexico and the EU, which called the tariffs “protectionism, pure and simple”.

The UK said it was “deeply disappointed” by the US decision, which followed weeks of negotiations.

EU trade commissioner Cecilia Malmstrom said it was a “bad day for world trade”, while European Commission president Jean-Claude Juncker said the move was “totally unacceptable.

The EU had “no choice” but to bring a case before the World Trade Organization and impose duties on US imports, he added.

Europe had previously outlined a list of items, including US bourbon, cranberries and jeans, as potential targets for retaliation.

Mexico’s Economy Ministry said it would place tariffs on items such as steel, pork legs and shoulders, apples, grapes, blueberries and cheese.

How did this start?

President Trump announced plans for tariffs on foreign steel and aluminium in March, justifying them on national security grounds.

He has argued that global oversupply of steel and aluminium, driven by China, threatens US steel and aluminium producers, which are vital to the US.

Since the announcement South Korea, Argentina, Australia and Brazil have agreed to put limits on the volume of metals they can ship to the US in lieu of tariffs.

The US granted temporary exemptions to the EU, Canada and Mexico amid negotiations over limits. That deadline was due to expire on 1 June, having already been extended by a month.

What did Wilbur Ross say?

US Commerce Secretary Wilbur Ross announced the sanctions from Paris, where he had been negotiating with EU leaders who were trying to avert the tariffs.

Mr Ross said talks had not made enough progress to warrant a further reprieve either for Europe or for Canada and Mexico, which are in negotiations with the US over North America’s free trade agreement.

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Mr Trump has the authority to lift the tariffs or alter them at any time, he added.

“We continue to be quite willing and indeed eager to have discussions with all those parties,” Mr Ross said.

Analysis: Theo Leggett, BBC business correspondent

The Trump administration is determined to wring concessions from its trading partners around the world – and it’s prepared to do so in belligerent style.

The President believes cheap imports harm US industry and cost US workers their jobs. On the campaign trail, he promised them a fairer deal – and it seems he’s happy to risk a trade war to get what he wants. In fact, he has previously suggested that trade wars are “good, and easy to win”.

So will it go that far? Certainly, the EU and Mexico seem prepared to retaliate – and Canada has hinted it in the past might take action as well. So it’s not looking good. But if you look at Washington’s dealings with China – its key target on trade – things seem less clear cut.

On several occasions the rhetoric between the two sides has been ramped up, threats have been made, then positions have softened. So far, an all-out trade war has been avoided. And China has made some concessions.

So perhaps this is simply how negotiations take place in the Trump era. Loudly – and in a blaze of publicity.

What does this do to the market?

Canada, Mexico and the EU combined exported $23bn worth of steel and aluminium to the US last year – nearly half of the $48bn of total steel and aluminium imports last year.

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Since Mr Trump’s announcement in March, companies in the US that buy metals have already reported higher prices and complained that US producers do not have the ability to meet demand.

Economists have warned that the rising metal costs will eventually get passed on to consumers in the US, and lead to job losses at firms that rely on the metals.

Mr Ross has dismissed the worries, arguing that the effects will be minimal.

Shares of US steel producers gained in trading on Thursday, while companies that rely on the metals, such as Caterpillar and Boeing, declined.

What happens next?



Canada, Mexico and the EU combined exported $23bn worth of steel and aluminium to the US last year – nearly half of the $48bn of total steel and aluminium imports last year.

Europe, Canada and Mexico say that as close allies of the US they should receive exemptions from the measures.

The UK said: “We will continue to work closely with the EU and US Administration to achieve a permanent exemption, and to ensure that UK workers are protected and safeguarded.”

France’s junior trade minister Jean-Baptiste Lemoyne said he expects EU counter-measures to be completed by mid-June.

Mexico said its retaliatory duties on US imports would be in place for as long as the US duties.

China has already imposed duties on $3bn worth of US goods in retaliation for the steel and aluminium tariffs.

How have businesses responded?

  • The US Aluminum Association, which represents major producers, criticised the US decision, saying tariffs would alienate allies and fail to address oversupply. The organisation’s president, Heidi Brock, called on the US to start talks with China over the issue
  • UK business lobby group the CBI called the tariffs “deeply concerning” but urged the parties to be cautious, given the potential costs of a trade war. “Now is not the time for any disproportionate escalation, and we urge the EU to consider this when initiating its response,” he said
  • UK Steel Director Gareth Stace said it was “correct” for the EU to pursue safeguards that will protect the market from a flood of imports shifted from the US. But he urged the countries to find a common solution that addresses the “root cause” of the issue.