Trump signs sweeping tariffs; Canada, Mexico exempted

AFP Washington, DC, USA Mar 09, 2018, 12.37 AM(IST)

US President Donald Trump holds up a proclamation during a White House ceremony to establish tariffs on imports of steel and aluminum at the White House. Photograph:( Reuters )

US President Donald Trump slapped steep trade tariffs on foreign steel and aluminum Thursday, drawing sharp protests from allies at home and abroad as the contentious move raised the specter of a global trade war. 

Signaling a sharp departure from a decades-long US-led drive for more open and less regulated trade, Trump declared that America had been "ravaged by aggressive foreign trade practices."

"It's really an assault on our country," he said, in announcing the tariffs of 25 per cent on imported steel and 10 per cent on aluminum.

Trump said the tariffs -- which will come into effect after 15 days -- will not initially apply to Canada and Mexico, and that close partners on security and trade could negotiate exemptions.

"Many of the countries that treat us the worst on trade and on the military are our allies, as they call them," he complained.

The tariffs, worth billions of dollars, sparked immediate protests from top trading partners the European Union and Brazil, with retaliatory action expected from China and other economic powers.

Leaning on a little-used and decades old national security clause in US trade law, Trump said he was fulfilling a campaign promise.

"I've been talking about this a long time, a lot longer than my political career," he said. "We've been treated very badly by our past administrations, by presidents that represented us that didn't know what they were doing."

The mercurial 45th president compared his action to those of predecessors George Washington, Abraham Lincoln and William McKinley.

Real friends

Canada, America's neighbor to the north, was its single-largest source of steel last year, followed by Brazil, South Korea, Russia, Mexico, Japan and Germany.

Regarding alumina and aluminum, Canada was also by far the largest supplier followed by China, Russia and the United Arab Emirates.

Trump had indicated he would be flexible toward "real friends," and during the signing confirmed Canada and Mexico would be permanently exempted if the ongoing renegotiation of the North American Free Trade Agreement is successful.

The US leader had also added Australia to a list of likely carve-outs, as a "great country" and "long term partner."

But he singled out Germany for criticism, reviving a longstanding gripe that European NATO allies do not pay their fair share.

"We have some friends and some enemies where we have been tremendously taken advantage of over the years on trade and on military," he said.

The EU's top trade official Cecilia Malmstroem insisted the entire bloc "should be excluded" from the tariffs as a "close ally," vowing to "seek more clarity" from Washington. 

Britain meanwhile said it would "work with EU partners to consider the scope for exemptions outlined today," saying "tariffs are not the right way" to tackle the problem of global over-capacity in steel.

Major producer Brazil immediately vowed to take "all necessary steps" in order to "protect its rights and interests" in response to the US move.

China had also warned it was ready to respond -- although Trump struck a more conciliatory tone in his announcement, pointing to negotiations under way to trim Washington's soaring bilateral trade deficit with Beijing.

Partners promise backlash 

Last week Trump stunned the world -- and his own aides -- with an off-the-cuff announcement of his plan, even before White House lawyers judged the legality of the tariffs. 

The metals are used in everything from cars to construction, roads to railways. 

While the full economic impact remains unknown, the political fallout was swift with the top Republican in Congress Paul Ryan publicly denouncing Trump's move, and vowing to push him to narrow its focus to "countries and practices that violate trade law."

More than 100 Republican lawmakers had written to Trump expressing "deep concern" about the policy, which threatens to sour already vinegared trans-Atlantic relations.

The European Union has promised tariffs on items from steel to peanut butter, bourbon and denim -- most of which are produced in states that Trump needs to win reelection.

Even as Trump approved the tariffs, 11 partners in the Asia-Pacific were in Santiago, Chile, to sign a multilateral trade deal embraced by president Barack Obama but rejected by Trump. 

The White House was left scrambling to catch up following Trump's shock move last week, as top economic advisor Gary Cohn -- who opposed it -- quit in protest.

"He may be globalist, but I still like him," Trump joked earlier Thursday, alluding to an ideological clash within his administration that the "nationalists" appear to have decisively won.