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Commerce secretary says US to extend tariffs relief to some allies, but not all

By Jennifer Jacobs • Apr 30, 2018 at 8:00 AM

WASHINGTON — The Trump administration plans to extend relief from steel and aluminum tariffs to some countries, but not all, when their temporary exemptions expire Tuesday, Commerce Secretary Wilbur Ross said.

Ross, in an interview in Washington late Saturday, declined to identify which nations would be spared from the tariffs. He said the announcement will be made right before the May 1 deadline for the duties to kick in. The secretary indicated Friday that nations have been asked to accept import quotas in return for tariff-free access of the metals into the U.S.

The steel and aluminum tariffs are fueling tensions with some of America’s strongest allies, just as Treasury Secretary Steven Mnuchin leads a delegation this week to China for talks on what the U.S. sees as Beijing’s unfair trading practices. Trump has threatened to impose tariffs on as much as $150 billion of Chinese goods if negotiations fail to yield progress, a move China that has said would provoke retaliation against key American imports.

For example, after Trump’s announcement, Beijing reportedly retaliated by announcing tariffs on agricultural items. Kansas is the leading producer of sorghum, which would be subject to a staggering 179 percent tariff.

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 U.S. steel and aluminum tariffs.

President Donald Trump used his broad powers under a little-used trade law to impose the 25 percent tariffs on steel and 10 percent on aluminum after a study by his administration found the imports threaten national security.

But Trump walked back from an earlier no-exemptions stance to give Australia, Argentina, Brazil, Canada, the European Union, Mexico and South Korea a temporary reprieve when the tariffs took effect in March, and directed U.S. Trade Representative Robert Lighthizer to handle negotiations with countries seeking exemptions.

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 U.S., which was already underway.

To avoid the steel tariff, South Korea agreed to limit U.S. shipments of the metal to about 2.7 million tons a year, the ministry said. The country also agreed to double to 50,000 the number of U.S. cars that could be imported without meeting local safety standards.

The European Union has been among the most vocal critics of the tariffs, saying that it doesn’t make sense for the U.S. to target steel and aluminum shipments of its defense partners in the name of national security risk. The EU has also said it’s prepared to apply retaliatory tariffs on $3.5 billion of imports from the U.S., ranging from orange juice to blue jeans.

French President Emmanuel Macron and German Chancellor Angela Merkel last week both visited Washington to appeal directly to Trump for permanent exemptions for the EU bloc, but failed to win any public guarantees.

Canada and Mexico, meanwhile, have rejected Trump’s suggestion of linking the discussions over metals tariffs to securing the U.S. better terms in a renegotiated North American Free Trade Agreement. All three nations are expected to resume talks over updating NAFTA on May 7, after Lighthizer returns from the trip to China with Mnuchin.


(With assistance from Bryce Baschuk and Andrew Mayeda.)


©2018 Bloomberg News

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