Trump grants key U.S. allies an extra month of tariff relief
President Donald Trump has decided to extend by one month a temporary exemption from steel and aluminum tariffs for Canada, Mexico and the European Union, the White House announced Monday evening.
The move allows key allies — and three of the U.S.’ four largest trading partners — until June 1 to reach some sort of deal with the Trump administration to avoid duties of 25 percent on steel and 10 percent on aluminum exports sent to the United States. The tariffs had been set to take effect at 12:01 a.m. Tuesday if Trump had not moved to extend the deadline.
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The administration has also reached preliminary agreements with three other countries that had initially been granted a temporary exemption — Argentina, Brazil and Australia — allowing them to escape the duties as details are finalized over the next 30 days, the White House said.
One other country, South Korea, had already reached a preliminary deal for a permanent exemption from the steel tariffs because it agreed to cap its exports to the U.S. at 70 percent of the average export volume over the previous three years.
“In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security,” the White House said in its declaration. “These agreements underscore the Trump administration’s successful strategy to reach fair outcomes with allies to protect our national security and address global challenges to the steel and aluminum industries.”
The declaration brings some clarity to a decision-making process that until the official release left key allies wondering whether they would beginning Tuesday face penalties sure to roil international markets and disrupt global supply chains. Few people inside the White House or overseas had been sure of what or even when Trump would decide.
Although the move grants some of the United States’ closest allies another month to work out a deal, it remains unclear what sort of concessions would satisfy Trump and his administration.
Commerce Secretary Wilbur Ross and other administration officials have said in recent days that countries would have to choose between either quotas or tariffs — but the EU, Canada and Mexico have said they expect a full exemption without having to agree to such restrictions.
“We’re busy alienating the few friends we have left,” said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies. “The president clearly, on trade issues, doesn’t make a distinction between the good guys and the bad guys. If you’re not doing exactly what he wants, you’re a bad guy by definition — and nothing else counts.”
The process of deciding on the exclusions and exemptions has been chaotic since the departure of former White House staff secretary Rob Porter, who was heavily invested in trade policy and making sure that differing viewpoints were included in the decision-making process.
U.S. Trade Representative Robert Lighthizer, meanwhile, has had myriad policy questions on his plate, including the ongoing NAFTA talks and his upcoming trip to China later this week to talk trade.
With any final decision still up in the air, some nations have indicated exactly how they will retaliate if and when Trump does impose the tariffs. The European Union last month generated a list of U.S. exports ranging from peanut butter to lipstick and yachts that would face punitive 25 percent duties on their way into the European market if Brussels is not spared. The EU’s list, which is valued at roughly $3.4 billion, is largely comprised of products from Republican states and districts that would bear the brunt of the tariff impact.