US drops steel and aluminum tariffs on Canada and Mexico
May 17, 2019
The US has dropped steel and aluminum tariffs on Canada and Mexico. The tariffs had stood for just under a year and were part of a bitter trade dispute between the North American trading partners.
US President Donald Trump said the US "will be selling our product into those countries, without the imposition of tariffs" during a speech to the National Association of Realtors.
US President Donald Trump has repeatedly boasted that the tariffs he has imposed on trading partners are a financial windfall but, research shows it is Americans who bear the brunt of the impact. DW has an overview.
Image: picture-alliance/newscom/B. Greenblatt
Solar panels and washing machines
The first round of tariffs in 2018 were on all imported washing machines and solar panels — not just those from China. A study by economists from the Federal Reserve Bank of
New York, Columbia University, and Princeton University found that the burden of Trump's tariffs — including taxes on steel, aluminum, solar panels falls entirely on US consumers and businesses who buy imported products.
On Friday May 10, 2019 President Donald Trump imposed sanctions on $200 billion (€178 billion) worth of Chinese goods. The move raised tariffs from 10% to 25% on a range of consumer products, including cell phones, computers and toys. China's Commerce Ministry said it "deeply regrets" the US decision.
Image: Getty Images/AFP/STR
Issues with the EU
In April 2019, the United States said it wanted to put tariffs on $11.2 billion worth of goods from the EU. The list includes helicopters and aircraft from Airbus as well as European exports like famous cheeses such as Stilton, Roquefort and Gouda, wines and oysters, ceramics, knives and pajamas.
Image: Imago/Ralph Peters
EU fights back
The EU imposed import duties of 25% on a $2.8 billion range of imports from the United States in retaliation for US tariffs on European steel and aluminum. Targeted US products include Harley-Davidson motorcycles, bourbon, peanuts, blue jeans, steel and aluminum.
Image: Getty Images/AFP/M. Ralston
European automakers next?
May 17, 2019 is the deadline for President Trump to decide on imposing tariffs on vehicle imports from the EU. According to diplomats, Germany, whose exports of cars and parts to the United States are more than half the EU total, wants to press ahead with talks to ward off tariffs on automakers Volkswagen, Mercedes and BMW.
Image: picture alliance/dpa
India not exempt
India, the world's biggest buyer of US almonds, on June 21, 2018 raised import duties on the nuts by 20% and increased tariffs on a range of other farm products and US iron and steel, in retaliation for US tariffs on Indian steel. Trump said last month that he would end preferential trade treatment for India, which would result in US tariffs on up to $5.6 billion of imports from India.
Image: Getty Images/AFP/R. Schmidt
North American neighbors in tariff spat
Mexico on June 5, 2018 imposed tariffs of up to 25% on American steel, pork, cheese, apples, potatoes and bourbon, in retaliation for US tariffs on Mexican metals. While to the north, Canada on July 1 imposed tariffs on $12.6 billion worth of U.S. goods, including steel, aluminum, coffee, ketchup and bourbon whiskey in retaliation for US tariffs on Canadian steel and aluminum.
Image: Edgard Garrido/REUTERS
7 images1 | 7
Watershed moment
Mexico described the move as "very satisfactory," while Canadian Prime Minister Justin Trudeau hailed the decision as a watershed moment in a bitter trade dispute between members of the North American Free Trade Agreement (NAFTA).
"Obviously these continued tariffs on steel and aluminum and our countermeasures represented significant barriers to moving forward with the new NAFTA agreement," Trudeau told a press conference.
In light of the agreement, Vice President Pence tweeted that he would be traveling to Canada to work on the revamped trade agreement, calling the deal "a WIN for all three nations."
Chinese steel now in focus
In a joint statement, the US and Canada said they would work to prevent cheap imports of steel and aluminum from entering North America. China has long been accused of flooding world markets with subsidized metal products, driving down world prices and hurting US producers.
The countries will take steps to prevent dumping and the importation of aluminium and steel that is unfairly subsidized, the statement says. The US will reserve the right to reimpose the tariffs if there is a surge in imports "beyond historic volumes."
The US, Mexico and Canada are part of the NAFTA free trade bloc. The terms of that alliance were renegotiated somewhat under Trump, though the renewed deal is still pending approval in Congress.
The national security clause
By imposing the tariffs on steel and aluminium and threatening ones on autos, Trump was relying on a rarely-used weapon in the US trade war arsenal — Section 232 of the Trade Expansion Act of 1962 — which lets the president impose tariffs on imports if the Commerce Department deems them a threat to national security.
However, the steel and aluminum tariffs were also designed to coerce Canada and Mexico into agreeing to a rewrite of North American free trade pact. The Mexicans and the Canadians went along last year with a revamped regional trade deal that was to Trump's liking. But the administration had refused to lift the import taxes until Friday.
While the tariffs helped many US steel and aluminum makers, the retaliatory tariffs hurt other sectors of the US economy, such as agriculture. At the time, Mexico and Canada imposed retaliatory tariffs on US metals, pork legs, apples, grapes, cheese and bourbon whisky, among other products.
Canada and Mexico were forced into rewriting the NAFTA trade pact. The new agreement is called the United States—Mexico—Canada Agreement Image: Getty Images/AFP/L. Hagberg
