Washington could drop ballast on steel and aluminum taxes
Donald Trump on March 6 at the White House in Washington
Washington hinted on Wednesday that Canada and Mexico could eventually be exempted from steel and aluminum taxes, without ruling out the risk of a trade confrontation with the European Union.
“There are possible exemptions for Mexico, Canada (…) and potentially other countries,” said Sarah Sanders, spokeswoman for Donald Trump, citing a “country by country” assessment on “national security”.
“We think the president will sign something by the end of the week,” she also confirmed. According to the New York Times, Mr. Trump could promulgate these taxes as of Thursday.
In the evening, the Washington Post said, citing US admiration officials, that Canada and Mexico would be exempt from these taxes for 30 days. The waiver could also be extended if progress was made in the renegotiation process of the North American Free Trade Agreement (NAFTA) between the three countries, the paper added.
Donald Trump announced a week ago his intention to impose 25% of taxes on imports of steel and 10% on those of aluminum, reviving the specter of a trade war between the United States and many of its allies to start with Canada, its first trading partner and leading supplier of steel.
US steel imports
The evocation of these exemptions comes as US Secretary of Commerce Wilbur Ross has also shown signs of appeasement by ensuring that the decision to apply these taxes was “well thought out” and that the United States was not looking for not a trade war.
In addition, Treasury Secretary Steven Mnuchin indicated that “waivers” were being considered and that the administration “negotiated deals” on a case-by-case basis.
These comments contrast with the intransigence displayed over the past few days by Donald Trump and several of his advisers who spoke last weekend about taxes imposed on all countries without exception.
Its chief economic adviser, Gary Cohn, resigned on Tuesday because of his opposition to such measures.
A hundred Republican elected representatives of the House of Representatives also sent Wednesday a letter to the president asking him not to impose uniform taxes, in which they state their “deep concern” about the consequences of such taxes on businesses and recommend more “targeted” measures.
EU Trade Commissioner Cecilia Malmström, 7 March 2018 in Brussels
Receiving Tuesday at the White House Swedish Prime Minister Stefan Löfven, the US president had taken the Europeans keenly “make it virtually impossible for us to do business with them and yet send them, their cars and everything else to United States”.
“The European Union has not treated us well and it is a very, very unfair commercial situation,” he had ranted.
If the Trump administration seemed to want to spare its Canadian and Mexican partners on Wednesday, the situation was still unclear with regard to the countries of the European Union.
– Peanut butter –
Europe trade with the USA
EU Trade Commissioner Cecilia Malmström still hopes to avoid “any escalation” and to see the European Union exempted. However, it has publicly indicated that it is preparing retaliation targeting iconic American products. She asserted that “there are no winners in a trade war” that “would harm transatlantic relations”.
European Council President Donald Tusk warned on Wednesday that trade wars were “bad and easy to lose” in response to the US president who said they were “good and easy to win”.
“It is now time for politicians on both sides of the Atlantic to act responsibly,” he said, adding that the dispute would be on the agenda of the next EU summit in Brussels on 22 and 23 March .
The Swedish Commissioner has detailed the measures being prepared by Brussels, starting with a list of US products that could be taxed in order to compensate in value the damage done to the European industry.
The list, which is still under discussion, includes “steel, industrial and agricultural products”, including “certain types of bourbon” and “peanut butter, cranberries and orange juice”, said Malmström.
European Commission President Jean-Claude Juncker had already revealed that symbolic marks like Harley-Davidson and Levi’s, as well as bourbon, were in the sights of Brussels.
Europeans export about 5 billion euros of steel and 1 billion euros of aluminum each year to the United States.
On Thursday, Chinese Foreign Minister Wang Yi warned that Beijing will “definitely” adopt an “appropriate and necessary response” to possible US trade sanctions.
As the world’s largest producer of steel and aluminum, however, China supplies only a tiny fraction of US imports in these sectors.
The trade deficit of the United States increased again in January to 56.6 billion dollars (+ 5%). For goods alone, the deficit with the European Union fell by 13.9% to $ 13.6 billion, including $ 5.4 billion against Germany.
It reached, for the whole of 2017, 568.4 billion for goods and services and 811.2 billion for goods only.