Trump sharpens trade row, threatens to tax German cars

Erika Holt
March 13, 2018

A few days ago Trump signed a decree imposing a 25% duty on steel and 10% on aluminum, which should take effect within two weeks.

The European Commission refuses to negotiate over the issue, believing that Trump's tariffs are an attack on global trade rules and principles.

Fox said that there were two exemptions to the USA tariffs, one which applies to countries with a strong national security relationship with the United States, and a second which will evaluate the impact of the tariffs on individual products if there are no U.S. domestic alternatives and there are national security considerations.

"The Australia-US trade relationship is a level playing field and one that the president is likely to hold up to other countries and say "that's the sort of fair deal I'm looking to get", he told ABC's 7.30 on Monday.

Just days after announcing the tariffs on March 1, Trump threatened to impose a tax on auto imports from the European Union if it "wants to further increase their already massive tariffs and barriers on USA companies doing business there". One convincing argument is that the tariffs - whereas they would provide a shield to the United States steel industry - will increase steel prices, which will backfire on consumers and industries using steel, including the auto industry.

"Thank you for confirming new tariffs won't have to be imposed on Australian steel & aluminum - good for jobs in Australia and in USA!"

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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. Trump's chief economic adviser, Gary Cohn, is resigning, reportedly because of his oppositions to the tariffs. If the United States is isolated, it could actually be good for Australia.

Australia is heavily involved in supporting US-led operations internationally and spends 2 percent of its GDP on defence - more than most allies - much of which is spent on US-made defence equipment.

A number of countries are already threatening retaliation if they are hit with the tariffs. Canada and Mexico, both members of the North American Free Trade Agreement, also warned that they would take strong countermeasures.

I talked to people in the metal fabrication industry after Trump's initial announcement, and the response to the tariffs was negative. "So nobody owes him anything, and that makes it a lot easier for them to retaliate". And yet they send their cars and everything else back into the USA, he said. It means the Executive can't unilaterally make these decisions on which products will face more of a tax in some misguided attempt to protect the American economy. In addition, they will raise costs and reduce choice for U.S. consumers of steel and aluminum, including industries that import these commodities.

Those messages are resonating among lawmakers in Congress, where Republicans in particular who have long shied away from any sort of fight with the White House are coming out forcefully against the tariffs.

Labor finance spokesman Jim Chalmers says steel destined for the USA from other countries will now be dumped below cost in Australia.

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