US imposes import tariffs on steel and aluminium amid global criticism

US imposes import tariffs on steel and aluminium
Cecilia Malmström © Dutch Government/Martijn Beekman

US President Donald Trump has signed a bill imposing strict import tariffs on steel and aluminium, but ambiguity around potential exemptions has led to friction in the EU.

Trump first proposed new import tariffs on steel and aluminium last week, and after an escalating war of words with the EU, has now signed legislation to introduce levies of 10% on aluminium imports and 25% on steel. The administration described the measure as being in the interests of national security, but this stance has been criticised by the EU, the European Investment Bank and the World Trade Organization.

The legislation will also protect domestic steel production in the US, but Trump has suggested there will be limited exemptions to the rule, which has led to some confusion about the implementation of the regulation.

Which countries will be exempt from the tariff?

Canada and Mexico are among those countries confirmed to be exempt from tariffs. The UK’s trade secretary, Liam Fox, has said that he will travel to the US next week, to discuss a potential exemption from the new regulation for the UK’s steel exports.

Fox explained that he would pursue an agreement with the US which would protect domestic production without negatively impacting UK steel exports. He said: “We understand the anxieties about steel over-production that the United States has but we believe there are other ways to tackle that on a multilateral basis. We will, of course, be looking to see how we can maximise the UK’s case for exemption under these particular circumstances.”

How has the EU reacted?

The European Commission has already criticised the measure and threatened to impose retaliatory 25% tariffs on hundreds of iconic US exports, including Harley-Davidson motorcycles, Levi’s jeans and bourbon.

Commissioner for Trade Cecilia Malmström has also warned that the text of the regulation imposing the tariffs and exemptions was ambiguous. She said: “There are different rumours about [what] could be excluded, and it is not crystal clear what came from the president yesterday”.

She also warned that if the US were to offer an exemption to one member state rather than to the entire EU, it would be “questioning the whole EU as a project”. Malmström confirmed that she has spoken to ministers in London to encourage them to act in unity with the EU, rather than pursuing an exclusive exemption.

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