Published: Thu, May 31, 2018
Markets | By Erika Turner

Commerce Secretary Ross Brings EU to the Negotiating Table with Tariff Threats

Commerce Secretary Ross Brings EU to the Negotiating Table with Tariff Threats

The 25% U.S. tariffs are due to come into effect on Friday morning United Kingdom time.

The European Union will impose counter measures after the United States chose to no longer exempt it from steel and aluminum tariffs, the head of the bloc's executive Jean-Claude Juncker said on Thursday.

The United States said it was moving ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, ending a two-month exemption and potentially setting the stage for a trade war with some of America's top allies.

US Commerce Secretary Wilbur Ross on Wednesday rejected calls to extend exemptions on the punishing import tariffs and warned that duties for massive US imports of automobiles were on the horizon.

"It's entirely up to United States authorities whether they want to enter into a trade conflict with their biggest partner, Europe", he said after meeting Mr Ross in Paris.

"Canada considers it frankly absurd that we would in any way be considered to be a national security threat to the United States", Canadian Foreign Minister Chrystia Freeland said before the tariffs were announced.

The tariffs - 25 percent on imports of steel and 10 percent on aluminum - take effect at midnight Friday.

Trump imposed the steel and aluminum penalties under a 1962 law that gives the president broad power to increase or reduce tariffs on goods deemed critical to national security.

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France's finance minister, Bruno Le Maire, called the US tariffs "unjustified, unjustifiable and unsafe".

Such tariffs could also "lead to the demise of the multilateral trading system based on WTO rules", the ministers said.

If the US moves forward with its tariffs, the European Union has threatened to impose retaliatory tariffs on USA orange juice, peanut butter and other goods in return.

EU Commission spokesman Margaritis Schinas said Thursday the European side is "ready to deal with any kind of scenario, and to defend the EU interests and global trade law". But on Wednesday night, Canadian and Mexican officials learned of the impending tariffs from news reports, according to one US industry official who spoke withPolitico. We are ready to rebuild this multilateralism with our American friends'. News reports say that Trump is determined to keep Germany luxury cars out of the U.S.

Popular US products like bourbon, jeans, and peanut butter are likely to be slapped with duties as part of the EU's response. "Nothing", French President Emmanuel Macron said in an impassioned speech Wednesday.

By increasing the cost of imported steel and aluminum, companies that rely on the metals will be forced to either accept the higher costs and lower profits or pass on the price increase to consumers.

In a clear reference to Trump, Macron added: "These solutions might bring symbolic satisfaction in the short term".

Europe did not want a trade war, he said, but Washington had to back down from "unjustified, unjustifiable and risky tariffs".

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