U.S. tariffs, who is safe (for now)

The saga of U.S. steel and aluminium tariffs continues. After Donald Trump's decision to impose tariffs of 25 percent on imported steel and 10 percent on aluminum, two exceptions for
Canada and Mexico have been announced, and many other countries asked to be excluded – particularly Europe and Japan, as we reported in the article "US steel and aluminium tariffs: exceptions and side-effects".

On March 22, the White House issued a proclamation stating that the U.S. will continue discussions with some nations – Australia, Argentina, South Korea, Brazil and the EU, as well as Canada and Mexico – to find "satisfactory alternative means to address the threatened impairment to the national security by imports of steel articles" coming from those countries.
What does this mean? The U.S. will continue negotiating with these countries, that will be granted an initial pass on the tariffs until May 1, 2018. The measures took effect on March 23.
Axel Eggert, Director General of the European Steel Association (EUROFER), welcomed the temporary exemption, thanking Commissioner Malmström for her determined efforts to get the EU excluded, but he declared that the danger to the EU steel market has not disappeared: “In the first two months of 2018, the mere whisper that the US would impose measures has coincided with a 12% surge in imports to the EU”. The risk is called trade deflection, and it's quite independent of the EU’s suspension. In this regard, the European Commission has launched on March 26 a safeguard investigation in response to the US restrictions on steel and aluminium covering 26 steel product types. "The procedure can also result in imposition of import tariffs or quotas that would shield EU producers from excessive imports, if this proves necessary."

According to media reports, the US and South Korea have already reached an agreement to permanently secure an exemption to the steel tariffs. In return, South Korea will be cutting its export volumes by 30 percent, from 3.8 to 2.6 million tons. South Korea was the third-largest source of steel imports in the US in terms of volumes last year.

Negotiations continue, also for the other countries, with "a gun to the head", as French President Emmanuel Macron defines the temporary suspension. Don't miss the next episode.

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