June 11, 2018

G-7 Update: As EU, Mexico, And Canada Fight Back On Steel And Aluminum Tariffs, U.S. President Suggests Getting Rid Of All Tariffs

Canadian Prime Minister Justin Trudeau hosted the leaders of the G-7, including President Donald Trump, in Quebec over the weekend. After criticizing “unfair” trading practices by Canada and members of the European Union, according to Politico, President Trump surprised U.S. allies by floating the idea of ending all tariffs and trade barriers among G-7 countries. The U.S. president said, “We should at least consider no tariffs, no barriers—scrapping all of it.” Politico reported German Chancellor Angela Merkel responded positively to President Trump’s suggestion, saying, “We’ll take it as a starting point.”

The next day, however, President Trump sounded much different. In a press conference with other G-7 leaders, the president threatened to end all trade with the other six nations.

President Trump’s G-7 comments come after increased tensions regarding his administration’s Section 232 steel and aluminum tariffs, and his decision to lift exemptions from those penalties for Canada, Mexico, and the countries that make up the European Union (EU). Last Wednesday, the European Commission endorsed a plan to impose tariffs totaling 25 percent on a range of U.S. products, including steel and aluminum products. European Commissioner of Trade Cecilia Malmström said, “This is a measured and proportionate response to the unilateral and illegal decision taken by the United States to impose tariffs on European steel and aluminum exports.” Malmström also argued the “EU’s reaction is fully in line with international trade law.”

The EU, Canada, and Mexico all have filed suits against the U.S.’s steel and aluminum penalties with the World Trade Organization. (Mexico and Canada also have announced retaliatory tariffs, and, like the EU’s, Canada’s penalties will hit steel and aluminum products.) The Russian government also is considering a suit.

Members of Congress from the president’s own party also are growing increasingly upset about the White House’s trade policy. Sen. Bob Corker (R-Tenn.), who is retiring after this year, has introduced legislation to limit the president’s ability to impose tariffs by requiring that he submit to Congress any plans to address imports under Section 232. At this writing, it seems unlikely that the bill will gain any traction in either the Senate or the U.S. House, however.

As a reminder, the Metals Service Center Institute issued a statement to the press on June 1 asking that President Trump reinstate exemptions for the U.S.’s NAFTA trading partners from the Section 232 steel and aluminum tariffs. Click here to read that statement.

The U.S. Commerce Department also continues to take product exemption requests from U.S. companies for the steel and aluminum tariffs. Click here to read more about that process.