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Mexico aims tariffs at Trump country, sees NAFTA complications

04 June 2018

President Trump announced the tariffs in March, but had given exemptions to the EU, Mexico, and Canada.

Canada, Mexico, and the European Union are widely expected to retaliate.

Wilbur Ross, the USA commerce secretary, said insufficient progress had been made in talks with the EU, Canada and Mexico, since the U.S. had agreed a temporary reprieve from the tariffs for the three close United States allies after they were unveiled by Trump two months ago.

Macroeconomic Advisers, a research firm focused on the US economy, reported Wednesday that the United States trade deficit in goods was "much narrower than expected", implying "substantially more" U.S. exports in the second quarter.

For his part, Trump on June 1 complained about what he said were "restrictive" trade practices by Canada after the government in Ottawa said it would respond to the new US tariffs with proportional duties.

Brazil, Argentina and Australia have agreed to limit steel shipments to the United States in exchange for being spared the tariffs, the Commerce Department said.

"The French, British and Germans held firm", French Finance Minister Bruno Le Maire told reporters.

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While the tariffs have had "major, positive effects" on industry jobs and workers, "the Trump administration's actions underscore its commitment to good-faith negotiations with our allies to enhance our national security while supporting American workers", the White House said in a statement.

We need to stop the hemorrhaging of American jobs as large corporations shut down in the United States and move to low-wage countries.

Tariffs on steel and aluminum imports to the US can help local producers of the metals by making foreign products more expensive.

"The government of Canada is confident that shared values, geography and common interests will ultimately overcome protectionism", Trudeau said. The US President had also threatened to respond to any new EU trade barriers with a tax on cars produced by European automakers.

These countermeasures consist of two lists of goods: one list that will be subject to a 25-per-cent tariff and a second list that will be subject to a 10-per-cent tariff.

The Canadian government on Friday took the additional step of requesting consultations with the World Trade Organization on the USA "improper use" of national security to impose sweeping tariffs.

The president took to Twitter on June 2 to defend his aggressive trade policies.

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"This is obviously a ridiculous situation that the USA has tied national security concerns to the trade of metals from Canada", he said.

Automakers responded negatively to the Trump administration's first announcement of the duties in March and on Thursday the trade group that represents foreign-brand auto dealers echoed that sentiment.

She calls the US measures illegal and counterproductive.

And speaking to reporters, Macron described the USA move as "a mistake in many ways because it responds to existing global imbalances in the worst way - by breaking up and creating economic nationalism".

Hill says the impacts of the tariffs can already be seen in rising steel prices, though there is still a lot of uncertainty as to what comes next.

The administration is taking the action under a relatively obscure US trade law meant to protect national security.

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Mexico aims tariffs at Trump country, sees NAFTA complications