Trump reported to impose hefty tariffs on steel and aluminium imports from Canada, Mexico and EU

The Trump administration is reportedly planning to impose hefty tariffs on steel and aluminium imports from Canada and EU. According to the Wall Street Journal, dropping EU from the exemption list for import tariffs of 25% on steel, and 10% on aluminium may take place as early as Thursday May 31. The Globe and Mail says imposing tariffs on Canada may take place on Thursday itself and it may soon spark a trade war and complicate the negotiations over the North American Free-Trade Agreement.

Washington Post first reported Donald Trump’s decision to hit Canada, Mexico and the European Union with tariffs on Wednesday. The news was also confirmed to The Globe and Mail by a Canadian official and a U.S. industry source. This is to be noted that the President has not made an official announcement and there could still be a last minute change.

The Trump administration has not found a satisfactory explanation in the EU arguments to win trading concessions on the issue. The move is likely to bring retaliatory action from EU trade regulators who have warned they will levy counter tariffs on American products as motorcycles, jeans and bourbon.

Canada has also prepared a plan that would involve U.S. steel and aluminium and other politically sensitive products.

Canada is the biggest supplier of steel and aluminium to the United States, with the value of shipments close to $20-billion annually. About 61% of the total aluminium import by the US was supplied by Canada in 2017.

The move would be the latest trade attack on Canada from its largest and the oldest trading partner: The president accused the country of “taking advantage” of the US under NAFTA and has been working on redesigning the agreement.

He also ordered an investigation into auto and automotive product imports to the United States that could lead to 25-per-cent tariffs on cars and trucks and hit Canada. About 80 per cent of Canadian-made vehicles are shipped to the U.S. market.

The increasing friction between the US and Europe over trade was evident early Wednesday when the US commerce secretary criticised EU for using tariffs as an “excuse” to refuse trade negotiations.

“China are paying their tariffs,” Ross told the panel. “China hasn’t used that as an excuse not to negotiate ... It’s only the EU that is insisting we can’t negotiate if there are tariffs,” he added.

Ross’s comments came after EU criticised import tariffs and insisted that no trade negotiations can be possible if tariffs are intact. The White House added new tariffs in between the negotiations on Tuesday, despite announcing that trade disputes are on hold.