Published: Tue, March 13, 2018
Global | By Marsha Munoz

Australia PM says Trump to grant tariff exemption

Australia PM says Trump to grant tariff exemption

Canada, for example, is the top USA source for aluminum and steel imports, so Trump exempted it from the tariffs announced, but only temporarily, saying: "We're going to hold off the tariff on (Canada and Mexico) to see whether we can make the deal on NAFTA". Canada and Mexico were temporarily exempt from the tariffs - but the Trump administration has suggested that'd depend on a new NAFTA deal.

Brussels is also looking at "safeguard" measures to protect its industry - restricting the bloc's imports of steel and aluminum to stop foreign supplies flooding the European market, which is allowed under World Trade Organisation rules.

Shortly after Trump's tweet, Australian Prime Minister Malcolm Turnbull said on Twitter the relationship between the two allies was fair and reciprocal. Over the weekend, he said in a tweet that the European Union could potentially be exempt from the steel and aluminum duties "if they drop their horrific barriers & tariffs on US products going in ..." "We just want fairness", Mr. Trump said.

Trump drew on rarely used national security grounds to place a 25 percent tax on steel imports and 10 percent tax on imported aluminum.

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Any trade war would upset an worldwide economic order that has achieved stability and relative health. Trump's chief economic adviser, Gary Cohn, is resigning, reportedly because of his oppositions to the tariffs.

He added, "Working very quickly on a security agreement so we don't have to impose steel or aluminum tariffs on our ally, the great nation of Australia!"

The US tariff for cars, at 2.5 per cent, was lower than the European Union rate of 10 per cent, but its rate of up to 25 per cent on trucks was higher.

The tariffs are being applied on the grounds of national security, which the president said was a "very important aspect" of the NAFTA accord that came into force in 1994.

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"Mexico reiterates that the negotiation of NAFTA must not be subject to conditions outside of that process".

"An in-kind tariff by the United States' top ten trading partners would expose close to 42 per cent of total US exports, leading to a widening in the trade deficit", they said. The steel tariff investigation was launched to see the impact of steel imports on US national security. Trump did say he expected both Canada and Mexico to take action to prevent other countries from sneaking steel into the sending them to Canada or Mexico first.

Critics point out that the tariffs will do more harm than good to the overall U.S. economy. The EU has compiled a list of products valued at more than 2.8 billion euros that includes everything from lipstick to kidney beans to motor boats that it would hit with its own 25 percent duties, while Japan and South Korea have threatened a challenge at the World Trade Organization.

For the U.S., Trump has long touted and tweeted that economy will see big gains from the move, as he throws a lifeline to domestic manufacturers. The investigation was set up to determine whether lower aluminium and steel prices from China was a risk to national security via the closure of US domestic steel and aluminium smelters. We can not lose our steel industry.

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