E.U., Brazil, South Korea and others get temporary exemptions from Trump’s steel tariffs



U.S. allies breathed sighs of relief Thursday after the Trump administration issued a temporary reprieve on tariffs on steel and aluminum, hours before they were set to begin. 

The decision to exclude some of the United States’ closest trading partners from the import tariffs gave some breathing space to the U.S. allies as they sought to negotiate permanent exemptions.  Argentina, Australia, Brazil, the European Union and South Korea are on the list U.S. Trade Representative Robert E. Lighthizer announced at a Senate hearing. Canada and Mexico already had been exempted.

But the wide scope of the exemptions — which now encompass more than half of the steel imported by the United States — raised questions about whether the tariffs would actually make a difference in supporting U.S. metal industries. Following the latest exemptions, the remaining countries hit hardest by the steel tariffs when they take effect Friday will be Russia, Taiwan and Turkey.

Some European leaders hailed the decision to exempt them.

Here’s how leaders around the world are reacting to President Trump’s proposed tariffs on steel and aluminum. (Sarah Parnass/The Washington Post)

“Only reasonable that EU seems to be omitted from tariffs based on national security grounds given that EU and US are close allies,” wrote Danish Prime Minister Lars Lokke Rasmussen on Twitter. “Rather than threatening to raise tariffs against one another EU and US should work together to solve the real problem of overcapacity.”

The leaders of the 28-nation European Union had gathered in Brussels, the E.U. capital, for a previously-scheduled summit that was taken over by fears of a trade war with the United States. They were already locked behind closed doors when word reached them that Lighthizer gave them temporary clemency during a Senate hearing. The European Union negotiates international trade relationships as a single bloc.

The decision eased discussions that were set to stretch late into the Brussels night. World leaders had subjected Washington to a furious lobbying effort to remove the tariff, announced by President Trump earlier this month, warning of a trade war and saying that they did not see why long-standing military allies should face the import taxes on national security grounds, the professed basis for Trump’s action.

The E.U. leaders had been set to run through a list of potential counter-tariffs against U.S. products, most of which come from areas rich with Trump voters. Kentucky bourbon and Wisconsin motorcycles and cranberries are among the potential targets.

But European leaders have said all along that they have no interest in an escalating back-and-forth with Washington.

“We need to avoid protectionism at the global level,” said European Council President Donald Tusk after the U.S. announcement. “This is a major risk for jobs, not only in Europe. In this respect, dialogue with the U.S. is key.”

 The real problem in international trade, they say, is China, and officials have embraced joint efforts with Washington to address what they say is Beijing’s unfair supports for its manufacturing industries.

Trump’s announcement of a 25 percent tariff on steel imports could greatly affect products that you may not know depend on it, like Reddi-wip. (Jhaan Elker/The Washington Post)

Such supports are what Trump says he is trying to tackle with a separate and far more sweeping $60 billion set of tariffs against China, which he announced Thursday.

Trump, however, has said the suspensions of the steel and aluminum tariffs are only temporary, and that he is willing to enact them if he is unable to attain better trade deals with U.S. partners.

“The idea that the president has, is that based on a certain set of criteria, that some countries should get out,” Lighthizer told the Senate hearing. “What he has decided to do is to pause the imposition of the tariffs with respect to those countries.”

Lighthizer said a day earlier that he expected that negotiations about permanent exemptions to the tariffs would be resolved by the end of April, creating pressure on the countries to reach a deal with Washington on measures that would satisfy Trump’s desire to improve the balance of trade.

But some European leaders were cautious about whether the E.U. and the White House could strike a deal that would stick.*

“The question on possible exemptions will be whether they are linked to conditions,” Belgian Prime Minister Charles Michel told reporters. He condemned what he described as the “brutal threat of protectionism” coming from Washington.

U.S. officials have demanded commitments from their trading partners that they take steps to reduce U.S. trade deficits and agree to work with them on pushing China to engage in fairer trade practices.

A succession of senior European officials has visited Washington in recent days, including German Economic Minister Peter Altmaier and Cecilia Malmström, the top E.U. trade official. She returned to Brussels on Thursday from a meeting with Commerce Secretary Wilbur Ross, after pushing hard for relief from the tariffs.

Even ahead of Lighthizer’s announcement, some top E.U. leaders were feeling increasingly confident that they could avoid a trade conflict.

“We need to preserve international trade, which is good for everyone,” French President Emmanuel Macron said as he entered the meeting. He spoke to Trump by telephone Wednesday and will make a state visit to Washington in late April.

Quentin Ariès contributed to this report.

         



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