United States extended tariffs exemption for European Union due to good trade talks: Ross

May 03, 2018, 09:39
United States extended tariffs exemption for European Union due to good trade talks: Ross

In a statement, the European Commission says that the decision "prolongs market uncertainty, which is already affecting business decisions".

Trump has invoked a 1962 trade law to erect protections for United States steel and aluminum producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China.

The study warns that imposing tariffs on an additional $100 billion of Chinese imports would come at a significant cost to the US economy, destroying 455,000 jobs and reducing GDP by $49 billion.

"We are not at the source of the global overcapacity in aluminium and steel and we fully respect all WTO rules".

The U.S. and China could "spend the next year developing how we deal with each other over a period of time", Lighthizer said. "Any future transatlantic work program has to be balanced and mutually beneficial", said the statement.

London on Monday had welcomed the "positive" decision. "I urge you to grant permanent exemptions - without quotas - for our aluminum trading partners that operate as market economies", chief executive of the US aluminum association Heidi Brock said in a letter to Trump.

The department said it remains open to engage with USA authorities to find a "mutually acceptable" outcome and encouraged domestic exporters to continue to engage with USA buyers.

"The imposition of tariffs might signal that the two regions are heading towards a more serious trade conflict", said Stephen Brown, European economist at Capital Economics. The EU, Canada and Mexico took a temporary exemption till May 1 and negotiations are ongoing till now. Canadian Prime Minister Justin Trudeau has said the U.S. understands that the tariffs could cause job losses on both sides of the border. The US made an agreement in-principle to remove the tariffs for Australia, Argentina and Brazil, which should be finalised soon, it said.

Last March President Donald Trump imposed worldwide tariffs of 25% on US imports of steel and 10% on aluminium. American businesses and workers could gain additional benefits from extended talks and re-negotiation of current trade agreements.

Trade ministers from the three countries met last week to advance talks on revising the 24-year-old NAFTA and made enough progress that they have set their next ministerial meeting for May 7.

The EU has compiled a list of retaliatory tariffs worth about $3.5 billion it will impose if its steel and aluminum isn't exempted.

"Rather, both the USA and the European Union would benefit from further deepening trade relations".

China remains broadly the USA main target, but the steel and aluminium tariffs are part of a wider bid to renegotiate the terms of trade with a number of countries, from close to home with NAFTA to far-flung producers on the other side of the globe.

President Donald Trump left the world in limbo on Monday until just hours before temporary tariff exemptions for the metals were due to expire for key allies. Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and National Economic Council Director Larry Kudlow are among the attendees, according to a statement from the Office of the White House Press Secretary. "At the same time, Berlin should push for a more ambitious national and European innovation policy as well as a resilient European foreign trade policy", said Heilmann and Wolff in a joint article published on Bruegel's website. The Dow, the Nasdaq and the S&P 500 all closed down Monday, with investors uneasy ahead of the Trump administration's tariffs move.

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