E.U., Brazil, South Korea and others get temporary exemptions from Trump's steel tariffs
The decision to exclude some of the United States’ closest trading partners from the import tariffs gave some space to those countries as they sought to negotiate permanent exemptions. Argentina, Australia, Brazil, the European Union and South Korea are on the list U.S. Trade Representative Robert E. Lighthizer announced at a Senate hearing. Canada and Mexico already had been exempted.
But the wide scope of the exemptions — which now encompass more than half of the steel imported by the United States — raised questions about whether the tariffs would actually make a difference in supporting U.S. metal industries. The countries hit hardest by the steel tariffs when they take effect Friday will be Russia, Turkey and Japan.
It was not immediately clear why Japan, a U.S. ally with a similar trade relationship as the countries with exemptions, was not included. The tariff was sure to set off a furious scramble in Tokyo.
Some European leaders hailed the decision to exempt them, even as it remained uncertain how they could win a permanent carve-out.
“Only reasonable that EU seems to be omitted from tariffs based on national security grounds given that EU and US are close allies,” Danish Prime Minister Lars Loekke Rasmussen wrote on Twitter. “Rather than threatening to raise tariffs against one another EU and US should work together to solve the real problem of overcapacity.”
The leaders of the 28-nation European Union had gathered in Brussels, the E.U. capital, for a previously scheduled summit that was taken over by fears of a trade war with the United States. They were already locked behind closed doors when word reached them that Lighthizer had announced temporary clemency for them during a Senate hearing. The European Union negotiates international trade relationships as a single bloc.
World leaders had subjected Washington to a furious lobbying effort to remove the tariffs, announced by President Trump this month; they had warned of a trade war and said that they did not see why long-standing military allies should face the import taxes on national security grounds, the professed basis for Trump’s action.
The E.U. leaders had been set to run through a list of potential counter-tariffs against U.S. products, including Kentucky bourbon (from the home state of Senate Majority Leader Mitch McConnell) and motorcycles (significant because Harley-Davidson is based in Wisconsin, the home state of House Speaker Paul D. Ryan).
But European leaders have said all along that they have no interest in an escalating back-and-forth with Washington.
“We need to avoid protectionism at the global level,” European Council President Donald Tusk said after the exemption announcement. “This is a major risk for jobs, not only in Europe. In this respect, dialogue with the U.S. is key.”
They held back from issuing a stronger statement as they awaited more clarity on White House plans. Some diplomats said they wouldn’t believe anything until they saw it on Trump’s Twitter feed.
The real problem in international trade, E.U. officials say, is China, and officials have embraced joint efforts with Washington to address what they say are Beijing’s unfair supports for its manufacturing industries.
Such supports are what Trump says he is trying to tackle with a separate and far more sweeping $60 billion set of tariffs against China, which he announced Thursday.
Trump, however, has said the suspensions of the steel and aluminum tariffs are only temporary and that he is willing to enact them if he is unable to attain better trade deals with U.S. partners.
U.S. officials have demanded commitments from their trading partners that they will take steps to reduce U.S. trade deficits and agree to work on pushing China to engage in fairer trade practices.
“The idea that the president has is that, based on a certain set of criteria, that some countries should get out,” Lighthizer told the Senate hearing.
“What he has decided to do is to pause the imposition of the tariffs with respect to those countries,” he said.
Permanent exemptions are expected to be resolved by the end of April, Lighthizer said Wednesday.
But some European leaders were cautious about whether the E.U. and the White House could strike a deal that would stick.
“The question on exemptions is whether they are linked to conditions,” Belgian Prime Minister Charles Michel told reporters.
He had little sympathy for Trump’s broader agenda. “Is it up to the rest of the world to resolve the issue of the United States’ trade deficit because there might have been brutal threats of protectionism?” Michel asked.
At the E.U. summit, leaders were also set to discuss the nerve agent attack on a former Russian spy in Salisbury, England. Despite European splits about how aggressively to respond, all 28 leaders said there was “no plausible alternative explanation” other than the Kremlin being culpable for the attack. Diplomats said they were likely to recall the E.U. ambassador to Moscow for consultations, and some countries were considering expulsions of Russian diplomats to match Britain’s actions.
The attack, which targeted Sergei Skripal, is believed to be the first chemical weapons assault on NATO soil since the 1949 founding of the alliance.