Did anyone see this coming? After United States President announced the countries on his “tariff hit list”, one of the targets, the European Union disclosed it would impose an estimated $3 Billion worth of tariffs on U.S. products. The move was in retaliation for President Trump’s decision to levy higher tariffs on European steel and aluminium products.
President Trump pushed through with his threat of imposing 25% tariffs on steel and 10% on aluminium that were imported from its trading partners. These allies included Canada, Mexico, and the EU. According to Trump, the decision was made on “national concerns”. Trump announced his decision in a tweet that read:
“The United States must, at long last, be treated fairly on trade. If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated. That is not free trade or fair trade, it is Stupid Trade!”
Cecilia Malmstrom, EU Commissioner for Trade, regretted the decision but reiterated the EU had no other choice:
“This is a measured and proportionate response to the unilateral and illegal decision taken by the United States to impose tariffs on European steel an aluminium exports. We regret that the United States left us with no other option than to safeguard EU interests.”
The EU’s retaliatory measures include a 25% tariff on imported U.S. steel and aluminium. It also recommends imposing tariffs on an estimated 100 items from bourbon, luxury motorcycles, peanut butter, cranberries, orange juice, porcelain tableware, fishing vessels, plasma cleaner machines, and digital flight recorders.
Last February, Wilbur Ross, Commerce Secretary, reported that the imports could “threaten to impair the national security”. The report focused on the employment rate of the U.S. steel industry which fell by one-third due to overproduction by China.
According to the Commerce Department, a global imposition of tariffs on steel and aluminium imports would increase domestic production that would make the industry viable in the long- term.
Statistics provided by the U.S. International Trade Commission revealed that steel imports to the U.S. have decreased by 22% in 2017 compared to its highest levels in 2014.