Published: Fri, June 01, 2018
Worldwide | By Stella Potter

Germany fears protectionist spiral as United States follows through with steel tariffs

Germany fears protectionist spiral as United States follows through with steel tariffs

"Canada buys more American steel than any other country in the world, half of USA steel exports", he said.

Canada and Mexico, embroiled in talks with the USA to modernise the North American Free Trade Agreement (NAFTA), responded swiftly and German Economy Minister Peter Altmaier said the European Union might team up with them.

A 25 per cent tariff on steel imports and 10 per cent tariff on aluminium imports would be imposed on the EU, Canada and Mexico starting at midnight local time, Ross told reporters. NAFTA renegotiations will be put in jeopardy by this move as well-the Trade Partnership estimates that withdrawal from NAFTA would cost the country a staggering 18 million jobs in the first year alone.

She spoke on the sidelines of Cansec, an annual arms-trade show where defence companies from around the world showcase their wares to government and military officials.

"Without a strong economy, you can't have a strong national security", Ross said.

"The Administration will continue to monitor steel and aluminum imports and adjust the measures in effect as necessary to protect the national security of the United States".

Europe had promised swift retaliation if it was hit with the trade penalties, and had warned it could quickly respond with 25% tariffs on United States products such as motorcycles, denim, cigarettes, cranberry juice and peanut butter.

"That United States has been taken advantage of for many decades on trade".

Robert Fisher, who served under former Presidents Ronald Reagan and George H.W. Bush, and helped negotiate NAFTA, said, "I don't think it's an effective negotiating tactic, and it's an unwarranted negotiating tactic with countries that are supposed to be allies".

European Union chief Jean-Claude Juncker said the 28-nation bloc "will announce in the next coming hours counter-balancing measures" in response to the United States action.

On Thursday, however, Trump announced that those exemptions were not being extended, and his decision immediately drew furious responses from Canadian President Justin Trudeau, German Chancellor Angela Merkel and French President Emmanuel Macron. The list of USA exports that European Union would impose additional tax on has already been decided, and notified to WTO.

"We want open markets, free markets but we have to convince the USA administration", Altmaier told German television. "The EU believes these unilateral USA tariffs are unjustified and at odds with World Trade Organisation rules", Jean-Claude Juncker, President, European Commission, said on Thursday.

European Commission President Jean-Claude Juncker also said the EU would respond with penalties of its own on USA exports.

Mexico said it would penalise USA imports including pork bellies, apples, grapes, cheeses and flat steel.

"Trump had delayed the tariffs on Mexico and Canada pending results from the negotiations, and threatening to impose them to pressure more", said Jeffrey A. Weldon, director of the political science program at the Mexico Autonomous Institute of Technology.

The comments from Director-General Roberto Azevedo come in the wake of USA trade penalties on imported steel and aluminium. Thursday's tariff announcement by the White House will further complicate agreeing on a G-7 agenda.

It's a bad day for world trade.

"President Trump is mainly hurting the American steel industry and consumers by driving up prices".

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