After a useless and baseless coercion to China when the country imposed $60 billion tariffs on Chinese imports, China retaliated in a similar way and imposed tariffs on U.S. Imports. Washington issued a statement after this development saying we will negotiate with China on tariffs; the shadow boxing is still going on, recently, China said it is ready for a trade war with the U.S.
Now the United States will announce its plans to impose tariffs on steel and aluminum from the European Union by Thursday morning. The report was confirmed in Wall Street Journal.
The decision came before the Friday, expiration of the deadline for exemptions to planned metals tariffs and stalled talks with EU. There is a strong possibility that retaliation would come from the bloc the similar way China retaliated over U.S. tariffs announcement.
According to the sources the announcement was scheduled for Thursday morning in Washington but the timing can be changed, the US Commerce Department and US Trade Representative Office, however, did not immediately commented on it.
Donald Trump on March 23 imposed 25% tariff on steel imports and 10% tariff on aluminum, tariff exemptions to EU, Brazil, Australia, Canada, Mexico, and Argentina was given in that tariff. Trump invoked 1962 trade law to lay protections for US steel and aluminum producers on national security grounds, as a result of a worldwide surplus of both the metals largely blamed on excessive production in China.
The European Commission which protects the trade policy of 28 EU nations said, the bloc should be permanently exempted from the tariffs since EU was not responsible for overproduction in steel and aluminum.
The commission has intimidated the US plans and said, the EU will set duties on roughly 2.8 billion euros (2.5 billion pounds) of US exports including peanut butter and denim jeans if the metals worth 6.4 billion are exposed to any tariffs in the United States.
The tariffs have increased concerns with US trading partners worldwide and prompted several challenges in front of the World Trade Organization, the tariffs are largely aimed at enabling the US steel and aluminum industries to grow their capacity utilization rates above 80% for the first time in many years.
It is at one point good for the country to focus on capacity utilization but these aggressive moves by the United States could create more problems among trading partners.
Economists and analysts say the standoff with the EU could ignite a trade war, particularly after Trump last week launched another national security investigation into car and truck imports that could result in another US tariffs.
The Trump administration has already given permanent metals tariff exemptions to many countries including Australia, Argentina, and South Korea, but in each case has set import quotas.
Friday’s deadline for exemptions also affects Canada and Mexico, which are in contentious negotiations with the United States on the North American Free Trade Agreement that Trump has said he wants to revamp or abandon if the talks fail.