Australia to Secure Exemption from US Tariffs

Reuters

Reuters

Malmstroem said the real problem is an oversupply of steel on global markets, and she rejected Trump's assertion that the tariffs are needed to protect USA national security, especially when most European Union countries are members of North Atlantic Treaty Organisation.

U.S. President Donald Trump has threatened to impose a hefty import duty on European cars if the European Union retaliates against his steep tariffs on aluminum and steel.

Trump made his comments after crunch talks in Brussels between European Union negotiators and US Trade Representative Robert Lighthizer in an effort to defuse a bitter row that many fear could turn into an all-out trade war.

"We're calling in all contacts at every level", Ms Julie Bishop, Australia's Foreign Minister, told the Australian Broadcasting Corp.

The European Union and Japan, the United States' top economic and military ally in Asia, also reiterated that their exports were not a threat to USA national security, rejecting Trump's justification for imposing the tariffs.

"If they drop their horrific barriers and tariffs on USA products going in, we will likewise drop ours".

Brazil, which after Canada is the biggest steel supplier to the United States market, said it wanted to join the exemption list, and Argentina made a similar case.

Saturday's meetings in Brussels had been previously planned but took on greater importance because of Trump's announcement of a 25-percent tariff on steel imports and 10 percent on aluminum imports.

Negotiations between the European Trade Commissioner Cecilia Malmström and US Trade Representative Robert Lighthizer are to continue next week after first talks failed to defuse the row.

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Likewise, Canadian Foreign Minister Chrystia Freeland warned this week of "responsive measures" if the Trump administration slapped tariffs on Canada, the largest exporter of steel to the U.S.

In announcing the measures, European Commission head Jean-Claude Juncker taunted Trump, saying the EU could match "stupid with stupid". We only need to look back at the harm President Bush's 2002 tariffs on steel had on the economy to know that they aren't the solution.

"Do you not care that 32,000 skilled men and women who work in our steel sector are fearful for their jobs and their families' future". The decision cost Mr Trump his top economic adviser, Gary Cohn, whose free trade views clashed with the protectionist move.

UK Steel's director Gareth Stace said the tariffs "would have a profound and detrimental impact on the UK steel sector, which exported some 350,000 tonnes of products to the USA in 2017, over 7% of its total exports".

Lighthizer didn't comment publicly after the meetings. European Commission vice president Jyrki Katainen said it would be "a meeting, not THE meeting".

Rather than announce an aggressive retaliatory response with threats against USA brands such as Levis jeans, Bourbon whiskies and Harley Davidson motorcycles, Juncker should be recognising the EU's existing high tariffs could be reduced as a trade for avoiding the new steel tariffs. Smith said in a statement Thursday after the signing that while he understands the president's desire to end unfair trade practices, he believes targeted policies would be more effective than blanket tariffs. He also added Australia to the list of likely carve-outs.

Fund managers from Oppenheimer, Federated, and Wells Fargo are among those that now see worldwide and emerging market equities as more attractive than the US, where the prospect of higher interest rates contributed to a slump in stocks in February, leaving the benchmark S&P 500 stock index up about 2.0 percent for the year-to-date, after turning in a 7.0 percent gain in January.

Although the impact of the measures announced - a 25 per cent global tariff on steel imports and 10 per cent on aluminum imports - may not in themselves amount to much, especially after some notable exemptions are allowed, it will be the secondary, tertiary and mostly unintended consequences that will determine their true effect on the United States economy and the rest of the world.

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