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US Lays Steel Tariffs on Canada, EU

Monday, June 4, 2018

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After months of discussion regarding possible exemptions, the United States allowed new tariffs on steel and aluminum imports from Canada and European Union countries to take effect Friday (June 1), triggering threats of retaliation from some of the country’s major trade partners.

The EU opened a case in the World Trade Organization on Friday in response to the measures, which place a 25 percent duty on steel imports into the U.S. and a 10 percent duty on aluminum imports. The tariffs were first announced in early March and officially went into effect later that month, but for many countries the duties were delayed while the U.S. continued larger trade negotiations.

Rolled steel
© / Leonid Eremeychuk

The United States will enforce 25-percent tariffs on steel products coming into the country from Canada and the EU, among other countries.

Canada, the single largest exporter of steel to the U.S., and Mexico were both immediately exempt from the tariffs during U.S. attempts to renegotiate NAFTA, the free-trade agreement among the North American countries. In late April, the U.S. announced that those two countries, along with the EU, Argentina, Brazil and Australia, would have continued exemptions from the tariffs until at least June 1.

The NAFTA talks have not yielded a new agreement, and on May 31, the U.S. signaled that it would not delay the tariffs again.

Canadian Concerns

Canadian Foreign Minister Chrystia Freeland said Wednesday, before the tariffs took effect, that the country would “respond appropriately” if the duties were imposed.

The inclusion of Canada in the tariffs has provoked criticism from even some who support the duties in general. The United Steel Workers union, which worked with the administration on developing policy on steel trade, expressed disappointment that Canada is subject to the tariffs.

“Our history shows that there is no stronger ally and partner on national security than Canada,” the USW said in a statement Thursday. “Today’s decision is wrongheaded and erodes the certainty companies need to conduct operations and invest in the future.”

The USW supports tariffs to level the playing field with countries, especially China, that it says “dump” steel products at unfair prices.

EU Action

The EU’s Trade Commissioner said in a statement Thursday that the U.S. tariffs “are primarily intended to protect the U.S. domestic industry from import competition, clearly at odds with WTO rules.”

Steel bridge construction
© / ivanastar

The Associated General Contractors of America opposes the tariffs over concerns they could lead to cost increases and delays on big infrastructure projects. 

“Throughout these talks, the U.S. has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU,” said Commissioner for Trade Cecilia Malmström. “This is not the way we do business, and certainly not between longstanding partners, friends and allies. Now that we have clarity, the EU's response will be proportionate and in accordance with WTO rules.”

The EU is discussing with its member states whether to move forward with duties on U.S. goods, detailed in a document from May 18, including food products such as corn, rice and beans; bourbon whiskey; tobacco products; stainless and alloy steel products; and cotton clothing.

Industry Reaction

The Associated General Contractors of America, which has long opposed the tariffs over concerns they could lead to cost increases and delays on big infrastructure projects, reaffirmed its opposition to the move on Friday.

"We are deeply troubled that the administration has opted to impose these costly new tariffs on trade from many of our closest trading partners," said AGC spokesperson Brian Turmail.

The largest American steel companies had not released official comment on the expansion of the tariffs as of Friday (June 1), but when the duties were first announced in March, Nucor, the nation’s biggest producer of steel products, praised the move.

“The Commerce Department was correct in concluding that illegally traded imports impair our national security by limiting the ability of our domestic steel industry to supply national defense and critical infrastructure needs, and the Trump Administration is taking the appropriate response to this threat," said Nucor CEO John Ferriola.


Tagged categories: Economy; Government; Steel

Comment from Michael Halliwell, (6/4/2018, 11:50 AM)

I sure hope Nucor can ramp up production in a hurry to "supply national defense and critical infrastructure needs." Otherwise, the tariffs are going to hurt the US. It is unfortunate that Canada, Mexico and the EU, traditional allies of the US, are now considered as "threats to national security."

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