Australia set to secure exemption from USA tariffs

Jeannie Matthews
March 12, 2018

Last week President Trump dialed back his earlier call for a punitive and blanket tariff on imported steel and aluminum. Specific steel and aluminum products could also be excluded and that authority will rest with Commerce Secretary Wilbur Ross.

At the same time, Trump's decision to exempt Canada and Mexico and allow other countries to avoid the penalties if they negotiate a deal to address US national security concerns has set off a high-stakes rush among nations eager to avoid the penalties but unclear on what, exactly, the USA wants in return. For example, the European Union has already threatened to introduce 28 billion euros worth of retaliatory tariffs on products from the USA like steel, agricultural products, peanut butter and orange juice.

He also wants to demand that our trading partners purchase more American-made products - whether it is our corn, cotton, cars or computers.

Time after time at the WTO trade negotiations the European Union has dragged its feet and in sectors such as cars or agriculture maintained higher tariffs than its own exporters enjoy.

China threatened to slap retaliatory tariffs on USA farm products like soybeans, and the European Union said it too could impose tariffs on signature American brands like Harley Davison motorbikes, Levi's jeans and bourbon. In fact, President Trump's proposal isn't the start to anything.

Mr. Trump threatened to tax European-made cars if they retaliated against the aluminum and steel tariffs with their own taxes on US imports like Harley Davidson motorcycles, bourbon and blue jeans. Former president George Bush imposed steel product tariffs in 2002, but withdrew them later, with little impact.

The 25-per-cent tariff on steel products, Korea's seventh-biggest export item to the U.S., also comes on top of anti-dumping and countervailing duties imposed on them.

So what happens when a country imposes tariffs?

What is unfolding before us is also a good reminder that we need to make a complete review of trade policy per se the USA under Trump. These new tariffs, which the President has applied to all nations, should help put a stop to the flood of illegal steel that continues to find its way into the United States. That's bad news for restaurants and fans of steaks and hamburgers, who will pay those higher prices.

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Steel tariffs, however, don't follow this pattern.

"Sometimes that steel is dumped for ridiculously low prices and that smashes our local businesses, our local industry and our local workers", Mr Chalmers told Sky News. Trump's chief economic adviser, Gary Cohn, is resigning, reportedly because of his oppositions to the tariffs. "Any type of trade war. hurts us as an American company", Harris said.

The Bush administration withdrew the tariffs in December 2003, about 21 months after they were imposed, but not without a cost. He wants to make access to USA markets contingent on foreigners playing by the rules (for example, paying full price for the research costs of our technologies). The U.S. has for several years had a trade surplus in steel with its NAFTA partners.

So why is Trump doing this? However, this step does not appear to be good enough to cope with the wave of protectionism.

USA officials have said such sales would make up only a few percent of the deficit while possibly threatening American national security.

Canadian cabinet members also kept phone lines "humming" with their US counterparts in an all-out push that recalled a lobbying effort in April 2017 to persuade Trump not to withdraw from NAFTA but to pursue re-negotiations instead.

Still, despite steel's political advantages, tariffs are still a large gamble for Trump.

United States allies Japan and Europe however are still in talks with American officials.

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