Trump signs order on steel and aluminium import tariffs, exemptions possible

European, US and Turkish media outlets report that US President Trump yesterday officially signed the executive order bringing in additional customs tariffs on steel and aluminium imports, which will come into effect in two weeks’ time. Due to pressure by trading partners and Republicans, President Trump showed signs of softening his plans to impose a 25% import duty on steel and a 10% duty on aluminium, and announced that there might be some exemptions. “America will remain open to modifying or removing the tariffs for individual nations as long as we can agree on a way to ensure that their products no longer threaten our security,” President Trump said at a news conference, CNBC reports.

Several media outlets report that President Trump exempted, at least temporarily, Mexico and Canada, and suggested the “great country” of Australia would also be spared, along with “possibly other countries as well” who were “real friends”. The 30-day exemption from the tariffs could be extended based on progress in renegotiating the North American Free Trade Agreement, The Washington Post indicates. The Daily Telegraph says that the UK would face a better prospect of avoiding US tariffs after leaving the EU. Vice-President Katainen immediately criticised the US idea of negotiated accords with individual EU Member States and warned that any exceptions must be valid for all of the EU, Corriere della Sera and other outlets point out.

“What I have read is that [the US] are probably considering some exemptions to [North American Free Trade Agreement] countries, but also they have mentioned the UK and maybe some other countries. So if they try to make an exemption for one of our member states it means the EU as a whole”, Vice-President Katainen said, The Daily Telegraph notes. Commissioner Malmström has said she believes the European Union should be exempt from the tariffs, and has a meeting scheduled for Saturday with Ambassador Lighthizer, the man in charge of negotiating with countries that seek an alternative to the tariffs, CNBC states. “The EU is a close ally of the US and we continue to be of the view that the EU should be excluded from these measures,” Commissioner Malmström posted on Twitter, The Irish Independent reports.

Commissioner Moscovici also noted the bloc wanted to avoid the trade war and warned that Europe could file an eventual complaint to the World Trade Organisation, Verslo Zinios writes. “We want Congress to understand that this would be a lose-lose situation,” he said. According to Reuters, Commissioner Moscovici argued: “If Donald Trump puts in place the measures, we have a whole arsenal at our disposal with which to respond”, Estonian media outlets report. Meanwhile, ECB President Mario Draghi joined the choir of criticism against President Trump’s plans, Jornal de Negócios reports. At a press conference, he said “unilateral decisions are dangerous. There are some concerns about the state of international relations,” adding that when tariffs are imposed on allies one begins to wonder who are really one’s enemies. Politiken believes that a trade war would damage both the USA and the EU, while President Trump’s tariff will only hurt the US. A group of 11 nations were set to sign a modified version of the Trans-Pacific Partnership (TTIP) trade agreement on Thursday that challenges President Trump’s view of trade as a zero-sum game, The New York Times, Il Messaggero and Croatian media outlers stress.

The pact, which covers 500 million people on either side of the Pacific Ocean, is intended to represent a new vision for global trade. The pact will be undeniably weaker without the participation of the US, but the resuscitated deal could serve as a powerful sign of how countries that have previously counted on American leadership are now forging ahead without it. While the original TTIP was conceived as a counterweight to China’s expanding economy, the new deal signatories are opening the door for China to join.

In an interview with Handelsblatt, Salzgitter CEO Jörg Fuhrmann warns against the trend towards protectionism and says that while the WTO has prevented similar tariffs being imposed on steel imports once before, it is not certain that it can do so again. However, there is still time for diplomacy, he argues and commends Commissioner Malmström for her efforts. Trends Tendances interviews economist André Sapir, who “would be extremely surprised if Europe takes unilateral retaliation measures”. He thinks Europe will remain within the legal framework and that it will opt for a procedure with the WTO. “We will not launch a trade war for that,” Mr Sapir asserts.