Trump delays auto tariffs amid trade dispute with China

Lester Mason
May 18, 2019

U.S., Canadian and Mexican officials are seeking to resolve a dispute over the metals tariffs as they seek ratification of the new U.S. -Mexico-Canada Agreement trade deal (USMCA).

A flurry of negotiations over the last two weeks - including phone calls between Prime Minister Justin Trudeau, Mr. Trump and Vice President Mike Pence - culminated in Foreign Minister Chrystia Freeland jetting to Washington Wednesday to sit down with U.S. Trade Representative Robert Lighthizer.

A report by the Commerce Department had found that America's innovation capacity "is now at serious risk as imports continue to displace American-owned production".

They warned that a fresh tariff battle would also jeopardize their ability to export US-made products internationally and put jobs at risk. "The president is also right to be deescalating tension with our North American allies".

Trump says he'll decide whether to take further action in 180 days.

The Trump administration also has reached a deal to remove steel and aluminum tariffs from Mexico.

The effective date for removing the tariffs is the outstanding issue, the news service said.

Spokesmen for U.S. Steel and Nucor, which had advocated for maintaining strong tariff protections, could not be reached for comment.

Canada's tariffs included a 25% penalty on more than 40 US steel products and 10% penalties on USA goods including maple syrup, coffee beans and strawberry jam, reported CNN.

In imposing the metals tariffs and threatening the ones on autos, the president was relying on a rarely used weapon in the USA trade war arsenal - Section 232 of the Trade Expansion Act of 1962 - which lets the president impose tariffs on imports if the Commerce Department deems them a threat to national security.

The approach harks back to the voluntary export restraints the USA negotiated with Japan during an earlier period of trade tension in the 1980s.

Trudeau had called the tariffs illegal and insulting, arguing that Canadian industry should never be considered a national security threat to the United States. "We'll be selling our product into those countries without the imposition of tariffs", President Donald Trump said on Friday.

Stelco shares soared 11 percent on the news, while top U.S. steelmaker Nucor fell 3.1 percent and U.S. Steel Corp, which had seen massive profit improvement because of the tariffs, fell 1.2 percent.

In exchange for getting the tariffs lifted, Canada and Mexico would agree to actions meant to stop steel and aluminium from China and other countries being sent to the US through Canada and Mexico. The in talks with both trading partners, but autos are not now part of discussions with the EU.

Meanwhile, Trump is locked in a high stakes rumble with China.

And so, almost a year after it began amid threats of blowing up NAFTA, Trump has ended his trade war against America's neighbors in order to improve the prospects of keeping their trade union intact.

Foreign companies supplied theU. Tariffs on Japan and the European Union will remain in place.

US automakers ostensibly would benefit from a tax on their foreign competitors.

But the US imposes a 25 percent tax on imported light trucks, the most profitable market segment for American companies.

Other reports by Iphone Fresh

Discuss This Article