US delays steel, aluminum tariffs until June

Rusted steel bridge

May 1, 2018 - President Trump on Monday issued two proclamations, providing Canada, Mexico and the European Union with an additional 30-day exemption to the proposed steel and aluminum tariffs. 

The announcement was made just hours before the tariffs were set to enter force on May 1, and days before the president travels to Beijing to discuss trade concerns.

The U.S. hopes the extension will buy time to negotiate better deals on the topic, and also rewarded Brazil, Argentina and Australia with permanent exemptions after reaching agreements "in principle" with those countries.

The last-minute delay of steel tariffs for the EU, Canada and Mexico reflect an ongoing negotiation tactic by the U.S.

Ever since President Trump announced the proposed taxes on foreign goods, the business community has risen in protest, fearing retaliatory actions from abroad. As of today, however, the U.S. has reached a deal with two of the top three sources of foreign steel: Brazil (in principle) and South Korea.

Only Canada remains as a top import source, but any deal there is tied to the lagging negotiations over NAFTA. Mexico is another top importer, according to the Department of Commerce's March Global Steel Trade Monitor, but its fate is similarly tied to talks over a new North American trade deal. 

Of U.S. allies, then, only the EU is left without a clear path forward for exemptions as of the latest proclamation. But the group of nations has made its own hard line clear, threatening to retaliate in force with a ten-page list of tariffs, affecting more than $3 billion worth of products.

"The EU has also consistently indicated its willingness to discuss current market access issues of interest to both sides, but has also made clear that, as a longstanding partner and friend of the U.S., we will not negotiate under threat," the European Commission said in a statement.

The Department of Commerce notes France and Germany are top exporters of a few steel products, such as stainless steel and pipe and tube. Most other members countries, however, are not on the list of top U.S. exporters.

Source: Supply Chain Dive