The U.S. extends to the EU the temporary exemption from tariffs on steel and aluminum imports

The Wall Street Journal announced that President Trump decided to postpone until June 1 the imposition of tariffs on steel and aluminum imports. This is in the case of the European Union and the other US allies.

On March 23, the U.S. imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports, but granted temporary exemptions to Canada, Mexico, Brazil, the EU, Australia and Argentina. Trump also granted a permanent exemption on tariffs on steel imports to South Korea as part of a review of a free trade pact.

The initial exemption was established until May 1, 2018. And a few hours before it expired, it was extended by another month.

The imposition of steel tariffs can have a double impact

Closing the American market could have a double negative impact on the European industry. Not only is America a major market – steel exports to the US represent about 7% of UK steel production. And it amounts to around £330 million a year. But Chinese producers could flood Europe with a surplus. A major cause of the crisis three years ago.

China remains the largest steel producer in the world. Responsible for more than half of the annual global production of 1.6 billion tons.

The European Commission specified that the extension of the temporary exemption prolonged the market uncertainty, which already affects business decisions.

In 2017, Europe exported 5.3 billion euros worth of steel products to the United States. And aluminum worth 1.1 billion euros.

If the EU is subject to taxes for products worth 6.4 billion euros (7.7 billion dollars) that it exports annually to the United States. It will set its own tariffs on American exports. In the amount of 2.8 billion euros (including products from makeup to motorcycles).

Article source: https://af.reuters.com/article/metalsNews/idAFL1N1S8041