EU to impose countermeasures against US goods, Canada threatens to do the same

Link

The European Union has said it will impose trade “countermeasures” against American goods in retaliation to Donald Trump’s new tariffs on imported steel and aluminium.

European Commission president Jean-Claude Juncker said retaliatory policies would be announced “in the next few days” in order to “rebalance” the trade situation between European and the US following the move by Mr Trump.

The US president said on Thursday he would introduce a 25 per cent import tariff on steel and 10 per cent on aluminium, claiming that the US had been suffering from “unfair trade”.

EU says it will react 'swiftly' after Trump trade war threat

“We strongly regret this step, which appears to represent a blatant intervention to protect US domestic industry and not to be based on any national security justification. Protectionism cannot be the answer to our common problem in the steel sector,” Mr Juncker said on Thusday evening.

“Instead of providing a solution, this move can only aggravate matters. The EU has been a close security ally of the US for decades.

“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk. I had the occasion to say that the EU would react adequately and that's what we will do.

“The EU will react firmly and commensurately to defend our interests. The Commission will bring forward in the next few days a proposal for WTO-compatible countermeasures against the US to rebalance the situation."

Europe’s Trade Commissioner Cecilia Malmström said the measures would “have a negative impact on transatlantic relations” and “will raise costs and reduce choice for US consumers of steel and aluminium, including industries that import these commodities”.

She said the EU would raise a dispute at the World Trade Organisation in Geneva over the tariffs “at the earliest opportunity”.

In what appears to be a veiled reference to Chinese steel production, the Commissioner added that “the root cause of problems in these two sectors is global overcapacity caused by non-market based production”.

During his presidential campaign Mr Trump claimed foreign countries were “dumping vast amounts of steel all over the United States, which essentially is killing our steelworkers and steel companies”.

He also said in January of this year that he had “a lot of problems” with European Union trade policy.

Last month Mr Trump also slapped “America First” tariffs on imported washing machines and solar panels, moves that most heavily affected China and South Korea.

Link 2

Two major U.S. allies said Thursday they are concerned about President Trump’s promise to levy steep tariffs on imported steel and aluminum, with one vowing retaliation if the administration goes through with the plan.

Canada and the United Kingdom both issued statements in response to President Trump's decision to announce next week that he will slap 25 percent tariffs on steel and 10 percent tariffs on aluminum imports. Canadian Foreign Minister Chrystia Freeland vowed to take "responsive measures" if the Trump administration imposes stiff tariffs on Canadian steel and aluminum products. “It is entirely inappropriate to view any trade with Canada as a national security threat to the United States," Freeland said in a statement. "Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers."

The United States, Canada and Mexico are in Mexico City this week for the seventh round of the North American Free Trade Agreement talks. Negotiators were distracted from their talks about updating the 24-year-old pact and were forced to shift their attention to the tariff news out of Washington, according to news reports. Canada has said they were hoping to hear from the White House that Canada, which is the largest importer of steel into the United States, would get an exemption from the tariffs. The United Steelworkers, which backs Trump's actions, has urged the administration to leave out Canada, arguing that they aren't part of the problem.

In recent months, tensions have ramped up in the trade relationship between Washington and Ottawa. Earlier this week, Trump argued that the United States is losing in its trade relationship with Canada, saying “Canada is very smooth” in its trading relationship, “so we have to start showing that we know what we’re doing.” The U.K., a country which Trump has said he would like to negotiate a trade deal with, also expressed concerns about the policy. “We are engaging with the U.S. on what this announcement means in practice,” a U.K. spokesperson said. “We have been clear that we are particularly concerned by any measures that would impact the U.K. steel and aluminum industries." “Overcapacity remains a significant global issue and we believe multilateral action is the only way to resolve it in all parties’ interests.”

Trump announced the proposal for tariffs, which he plans to officially impose next week, after a meeting with steel and aluminum executives, who have pressed the administration for action to help domestic producers. Last week, Commerce Secretary Wilbur Ross released the recommendations of the steel and aluminum reports that gave Trump several choices on tariffs and quotas.

Trump is an absolute moron for this, literally no one supports these tariffs not even his own party.

Oh good, a trade war. All because we can't share.

@perfect_blue: there is some support for it on the democrat side but it's understandably not popular to praise trump for anything. I think there is plenty of unfair steel dumping going on and it should be stopped.

The funny thing is that it is the American steel companies that are buying the cheap foreign steel slabs and then finishing them.

trump is in a pickle. he made some pretty stupid promises during his campaign and now he's stuck w/ 2 bad options. actually follow up on it to the determent of the country, or back off and admit he didn't know what the hell he was talking about during the campaign. he seems to be choosing the former. saving face is more important to a narcissist than negative effects on the country.

Doesn't this have to go through congress? What is the problem then really?

Nope, Trade is actually one of the areas the president have a lot of power in.

Trump can impose these without asking anyone.

I didn't know.

Oh well, this will most likely affect GDP over time.

that is what I thought as well.

I am actually surprised he has done more tariffs and the like until now. I know he did when he got started (TTP) but I am bit surprised how it went quite for a long time.

basically every country other than Russia will get a Tariff

who cares about EU and canada will back down

Oh things are going to cost more now. Enjoy.

Hmm well from what I've heard, Trump can bypass congress to impose tariffs with an executive order, if he can make the case that it constitutes a national emergency. I could be wrong about that of course.

Thats a bit of a silly statement. Isnt the EU the main export market for the United States?

They will just slap the US with the same increase in other products. He basically crashes other markets while boosting steel markets.

Well, I'm curious. Our goods have often been subjected to high tariffs and taxes by other countries. Why are they allowed to do that, while we can not? Shouldn't we just have a level playing field?

His power to deal with Trade has nothing to do with an executive order.

He can either use the Trade Act of 1974, the International Emergency Economic Powers Act of 1977. or Trading with the Enemy Act of 1917

As mentioned, the president's power as to trade is actually pretty broad.

Ah right, that's interesting to know. Thanks for the info! Okay so I'm unsure, are there any preconditions to him using any of these laws? Or can he go ahead and unilaterally place tariffs on a country without reaching a consensus with congress. Sorry if that's clumsily worded, I mean does he have to justify his reasoning for the tariffs (i.e. in the event of an emergency, a hostile nation etc), or can he basically just call upon any of the three trade acts you mentioned at any time, and under any circumstances?

Oh and bonus question! (If you don't mind explaining it to a confused European of course) So supposing he goes ahead and places indefinite tariffs on the EU, China, Canada, Mexico or whoever... does that mean the next president can use an executive order him/herself to nullify them, or would that decision have to pass congress?

Damn it, Trump!

Well, Canada doesn't have tariffs on any US goods. I believe there is a lumber dispute, but aside from that its been a level field. As for the EU I think its mostly the same, not sure about the auto industry.

This is mainly an attack on China than any other country, though I think trump wants it to hurt the allies as well. Trump wants to negotiate better terms (ie lopsided) in a NAFTA agreement. I don't think thats smart, since the Canadians will just do more deals with China/India instead. And the mexicans, well they aren't in a good position to negotiate, but they provide cheap labor and alot of corporations are strongly against any actions against mexico because it hurts their bottom line.

@mark1974: Dumping means selling those raw materials to your consumer industries at below market value. You know what you do to countries that do that? You say thank you.

@n64dd: What are you basing that on? Anything at all? I’m actually curious.

Because it effects markets and country's.

Which goods?

Think about it, what's the point for any market to invest into it or focus into it when every 4 years rules change and prices which makes it a extremely instable investment or market.

I hope for them, that it has to go to congress and can only be changed once in a decade or two.

Yes, there are some conditions that have to be met. But Congress has given the president a lot of power. Which I bet they never assume could come back to bite them.

Trading with an enemy means that the president has the power to set unlimited tariffs during war times, the key here is that it does not require it to be war with the nation in question, but just War in general. So since we are still considered at war, Trump could use this as he sees fit. the Emergency Economic act mentions, a national emergency, which has a broad base, Here Trump could use the crises in Puerto Rico as a reason or even jobs moving abroad. And same goes for the trade act, here Trump again just have to find a decent argument as to something that is considered as having a negative influence and he can impose tariffs.

As to the next president, he does not need any order, he or she has the same power and can remove the tariffs.

Ivory backscratchers for starters.

Countries all over the world are banning and limiting Ivory because the ivory trade has decimated the worlds elephant populations. Why would they then want to buy "Ivory backscratchers" from the US?

@sonicare: lol, are you Mr. Burns?

You shouldn't purchase ivory for starters.

Was that the only product you could find?

Wow I see, so the vagueness of the aforementioned trade acts pretty much allows Trump a fairly free hand to start a trade war? You're right, that is indeed a lot of power for one person to possess lol. Yeah no doubt, could come back to bite us all, depending on how things play out in the next few weeks.

Good analysis, thank you. And as to the next president, okay that makes sense. Was just curious.

It eliminates steel jobs in America which are good paying jobs. It is also worse for the environment to make steel in China where there are no environmental laws compared to the much cleaner mills in America. They don't sell their steel for less than it costs to make it just to be nice to the US. It is also a matter of national security. We cant go to war with China and then ask them to ship us steel to make bombs with because we can no longer make our own. I'm not at all sure these tariffs are a good idea but there are a few things to think about. We need strong manufacturing in America, the service economy isn't working out too well for a lot of people.

@mark1974: Yeah, except that’s not actually happening. 70% of steel consumed in the US is made in America. The bulk of the remaining steel comes from our neighbor to the north, Canada, as well as our allies in Europe.

I’ll give you a larger threat to America in the event of war. Not having a single reliable ally left because our Retard in Chief has alienated us from the world via a combination of trade wars, deep cuts to the state department, and verbally blasting all of our oldest and dearest allies on Twitter.

@ryanseacrest123: If the choice were only that simple, but steel consuming industry workers outnumber the steel producing ones 45:1, and demand for their industries suffer as raw material prices increase.

It’s crony capitalism at its worst. Trump makes good on a campaign promise for the benefit of a few thousand steel workers to the detriment of all remaining Americans via higher consumer prices.

Basically, he has no idea what he is doing and literally not one educated person in academia or the financial markets thinks this is a good idea, even those in his own party. Everyone loses trade wars and that has been historically proven time and time again. Economists are so afraid of them that there has not been one since the 30s Smoot-Hawley Act kicked off the Great Depression. Trade is not a zero sum game.

Also the quote below...let’s be honest, was this not everyone’s worst fear come to life from this old demented gameshow host? Sending America into a recession because he was cranky. It’s time to remove this mistake.

From NBC News:

“According to two officials, Trump’s decision to launch a potential trade war was born out of anger at other simmering issues and the result of a broken internal process that has failed to deliver him consensus views that represent the best advice of his team.

On Wednesday evening, the president became “unglued,” in the words of one official familiar with the president’s state of mind.

A trifecta of events had set him off in a way that two officials said they had not seen before: Hope Hicks’ testimony to lawmakers investigating Russia’s interference in the 2016 election, conduct by his embattled attorney general and the treatment of his son-in-law by his chief of staff.

Trump, the two officials said, was angry and gunning for a fight, and he chose a trade war.”

@Baconstrip78: It's great to hear that 70% of steel consumed in America was made here. That is surprising but I'm willing to bet that 70% figure includes steel finished in American mini mills from foreign slabs. We have very little capacity in the US for taking it all the way from iron ore to a finished product. There are not many coke plants and blast furnaces left. Thats why we have a national security concern to make sure we keep the capacity we do have. Even though China is not a big exporter to the US they have vowed to destroy the US steel industry and that is some scary talk. Trump is not the only nut job out there saying crazy things. Other countries protect their industries and maybe we should too.

I was totally joking about ivory backscratchers.

LOl. YOu got it!. +10 points to pefect blue and gryffondur.

President Dump

Drumpf

I was wondering. Did you get the reaction you wanted? :P

There is a good reason why we make it hard for american cars to enter our market here in Europe.

And it's because american automobiles are dangerous. They do not conform to any safety regulations known to man. They are death traps. And on top of that, they are highly unreliable. When you turn the key in american car, there is 60% chance it will not start.

we do not want these Mad Max vehicles on our roads.

By the way, Trump's effort to boost the sales of american automobiles has totally backfired: -since Trump basically said european cars will get lot pricier, tens of thousands of americans decided to buy european car before this happened. Thanks to this, the sales of european automobiles in USA peaked over the past few days. Theyre selling like hot cakes!

So much for Trump and his american autos..

Well that's a load of bull shit......did you bring your shovel?

EU has prepared list of products for retaliatory tariffs, calculated for maximum political impact. List includes Harley-Davidson to hurt Paul Ryan, bourbon whiskey to hurt Mitch McConnell, and Levi-Strauss to hurt Nancy Pelosi.

Well, let´s see where it leads and to be fair if you look at what the EU plans to "attack" it´s not the biggest loss,

It will lead to higher costs for consumers and thousands of people losing their jobs, there is no winner here.