USA: "We will not exempt any country from the application of steel and aluminum tariffs"

Alina Vasilescu (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section /

USA: "We will not exempt any country from the application of steel and aluminum tariffs"

The EU, which is preparing retaliatory tariffs of its own against the US, is carrying out talks with the countries that will be affected by the taxes proposed by the Americans: Japan, Canada, Brazil and Turkey 

German economy minister: "President Trump wants to play a game that no one can win"

One of the top advisors to US president Donald Trump has recently announced that the US will not make any exception from the application of tariffs set on imported steel and aluminum, even if the EU is preparing reprisals, according to ft.com.

On Thursday, Trump announced that he would impose 25% tariffs on steel imports and 10% on aluminum. The information has caused stock prices for companies in those sectors to drop, as investors were preparing for the possibility of a trade war.

Peter Navarro, who is in charge of the trade policy department in the White House, said that even though there would be some exemptions from those tariffs for certain uses of the concerned products, there will be no exemption for countries, which represents a major blow for major partners of the United States, such as Canada, Great Britain and South Korea.

"Once you exclude certain countries, you have to raise the tariffs for the others ... and that is a slippery slope", said Navarro, according to CNN.

In this context, the EU is carrying out talks with countries which might be affected by the measures proposed by Trump: Japan, Canada, Brazil and Turkey, according to European diplomats.

Jean-Claude Juncker, the president of the European Commission, has scheduled a date for today, for talks on the subject, with Lakshmi Mittal, the CEO of "ArcelorMittal", the world's biggest steel producer.

The EU has drafted a list of measures - tariff reprisals - of 2.8 billion Euros, of which approximately one third concern steel and aluminum, one third - agricultural products and one third - other goods. The list, which was created a few days ago, comprises goods such as corn and orange juice all the way to Harley-Davidson motorcycles and bourbon.

But in response, Trump wrote on Twitter, that he might impose tariffs on car imports, if European leaders raise tariffs on American goods.

The German automotive industry has expressed on Sunday its fears over the risk of a transatlantic trade war, and warned that such a conflict would create "only losers on both sides".

"Punitive tariffs can't be the solution", said Bernhard Mattes, the president of the automotive industry federation of Germany, (VDA), who further said: "A trade war between the US and Europe needs to be avoided at any price".

In turn, Brigitte Zypries, the German Economy minister, urged Trump to listen "to reasonable voices" and to think the proposed tariffs over. She said: "President Trump wants to play a game that no one can win. The ongoing increase of tariffs on a growing number of products can eventually lead to a situation in which decades of cutting tariffs , free trade and prosperity are in danger".

Republicans also urged Trump to change the plan concerning the proposed tariffs. Kevin Brady, Republican congressman, said that "fairly traded steel and aluminum would have to be exempted from tariffs", referring to products coming from Canada, Mexico and the EU.

British PM Theresa May told American president Donald Trump that she is deeply concerned about the announcement on the introduction of tariffs on steel and aluminum imports.

According to the British prime-minister, multilateral action is the only way to resolve the issue of global overcapacity, to the interest of all parties.

Moody's: Trump's plan will affect steel consumer companies in the US

Donald Trump's plan to impose tariffs on steel and aluminum imports will have a positive effect on steel producers, in the short term, but will affect producers that use steel and their employees, whose numbers are far greater than that of metallurgists, according to an analysis by Moody's Investors Service.

Moody's shows that in the metallurgic sector there are approximately 140,000 employees (according to the American Iron and Steel Institute), whereas steel consuming producers have approximately 6.5 million employees.

"Workers in these sectors will probably be affected by the higher steel prices. Domestic producers might opt to o import steel components for finished products, to lower their production costs, which could lead to a drop in the demand for domestic demand for steel in the long run", according to Moody's.

Shares of "ArcelorMittal" fell 1% yesterday, on the Amsterdam market, at 15:30, reaching 26.41 Euros. Also, shares of "Thyssenkrupp" AG, the biggest German metallurgic group, dropped 1.4%, to 20.81 Euros, but those of its smaller competitor "Salzgitter" AG rose 0.02%, to 43.44 Euros .

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