Trade war or no trade war?

Saul Bowman
May 1, 2018

Trump ordered the tariffs on March 22, citing a threat to national security, making plain that he meant to use the duties, or threat of them, as leverage to win concessions from American trading partners.

"The administration has reached agreements in principle with Argentina, Australia, and Brazil, details of which will be finalized in the next 30 days".

Asked about concerns over possible retaliatory measures by China, Mnuchin said: "It's not a worry of mine", adding that Trump was focused on "free and fair and reciprocal trade".

The EU has said it would then introduce levies on 2.8 billion euros (US$3.5 billion) of imports on iconic American goods in response to the proposed action by the White House. South Korea made up the largest share, shipping about 13 percent of US imports, according to an American Iron and Steel Institute analysis of government data.

Mnuchin's comments were similar to those of Commerce Secretary Wilbur Ross, who said late Saturday that the White House will announce its decision on tariffs right before the May 1 deadline.

The Trump administration granted the exemptions shortly after the president's decision to impose the tariffs, but the move was only temporary and predicated on the promise of talks to reduce trade imbalances between the U.S. and other countries.

Talks continue with Canada, Mexico and the EU.

South Korean officials won a permanent exemption from steel tariffs in March as part of an updated free trade agreement with the U.S.

The EU and USA are the world's biggest economic partners, with two-way trade valued at US$765 billion (632 billion euros) for goods in 2017 and at 437 billion euros for services in 2016, according to the European Commission.

The tariffs are already in effect for other countries, including China and Russian Federation. The EU has threatened to retaliate with duties on iconic American goods such as Harley-Davidson motorcycles and Kentucky bourbon.

Canada and Mexico, meanwhile, have rejected Trump's suggestion of linking the discussions over metals tariffs to securing the US better terms in a renegotiated North American Free Trade Agreement.

Canada is the biggest importer of steel into the US.

"We're looking to have a very frank discussion on trade, on the issues of the trade imbalance", he said ahead of remarks due later on Monday at a conference in Beverly Hills, California.

"If you let everybody back out of the tariff, and you let them out of any kind of quota, how would you ever reduce the imports here?"

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