In an announcement that was being expected by the European Union following meetings between executives of booth countries earlier this week, the block, along with six other countries would get temporary exemption from the Trump tariffs already announced by the U.S. on steel and aluminum.
This announcement was made on Thursday by the U.S. Trade Representative Robert Lighthizer.
Argentina, Australia, Brazil, South Korea, and the EU are the countries that would be granted the exemption announced Lighthizer while speaking to the Senate Finance Committee.
Canada and Mexico had already been granted conditional exemption by the U.S. from the tariffs – the condition being that both the countries would continue to enjoy the earlier tariffs on export of steel and aluminum into the U.S. till such time that they do not agree to a North American Free Trade Agreement (Nafta) deal that is satisfactory for the U.S. the exemptions would continue if the U.S is satisfied with the ultimate outcome of the currently ongoing Nafta renegotiations.
The U.S. is engaged in talks with a number of countries which are at various stages of progress about trade deals, Lighthizer said and till the final outcome of those talks, the president decided “to pause the imposition of tariffs with respect to those countries.”
Donald Trump had imposed a 25 per cent tariff on import of steel and a 10 per cent tariff on aluminum import into the U.S. through a Presidential decree about two weeks back which cam into effect on Friday even though there were large scale opposition to those tariffs from various business groups and trading partners of the country from all around the globe
There have been multiple warnings to the White House from multiple countries – especially China, that imposition of those tariff on the metals would be met with retaliatory measures.
The European union is “always willing to engage with our American partners, but we do not negotiate anything under pressure or threat”, said Cecilia Malmstrom, Trade Commissioner of the economic bloc.
The current trade deficit that the U.S. has with other countries is about 566 billion U.S. dollars in 2017 and one of the election campaign promises that was made by Trump during the 2016 U.S. presidential election campaign was to reduce that trade deficit. The tariff on steel and aluminum is one of those campaign promises.
However, according to experts and economists, the major reason for the trade deficit that the U.S. has with other countries is the low rate of savings in the country in relation to investments compared to other economies and therefore they are of the view that the Trump tariffs are most unlikely to reduce the U.S. current account into balance.
(Adapted from Xinhuanet.com)