Just hours before temporary exemptions on steel and aluminum imports from the European Union, Canada and Mexico were due to expire at 12:01 a.m. on Friday, the Trump administration has imposed the 25% and 10% tariffs on those imports originally announced in March. Those countries and other U.S. allies and trading partners had been granted temporary exemptions from the tariffs.
U.S. Commerce Secretary Wilbur Ross said the United States is willing to grant a permanent exemption to imports from the European Union if that economic bloc makes concessions in stalled trade talks. European officials said they won’t make concessions to gain a permanent exemption. The EU has threatened to impose counter-tariffs on 2.8 billion euros ($3.3 billion) of American imports as soon as June 20.
Ross also linked permanent exemptions for Canada and Mexico to revisions in the North American Free Trade Agreement (NAFTA) now in negotiation with Canada and Mexico. Canada said yesterday that it will respond “appropriately” to any steel and aluminum tariffs, and Mexican Economy Minister Ildefonso Guajardo said earlier this year that retaliation is an option.
The Trump administration has also begun a national-security investigation into auto imports, which is the first step to possible tariffs on those imports. Raising tariffs on auto imports would put more pressure on Canada and Mexico in those NAFTA talks.
“We continue to be quite willing and eager to have further discussions with all of those parties,” Ross told reporters on a conference call on Thursday. “We are awaiting their reaction.”
Meanwhile financial markets are moderately lower with the Standard & Poor’s 500 stock index off 0.55% as of 11 a.m. New York time and the Dow Jones Industrial Average lower by 1.05%. The Dow has more exposure to big U.S. exporters such as Boeing (BA) and Caterpillar (CAT) than does the S&P 500. Shares of Boeing are down 1.37% this morning.