EC dissatisfied with Trump’s delay in imposing tariffs, ‘market uncertainty’ extends

U.S. President Donald Trump has postponed the introduction of new tariffs on steel and aluminum imports for Canada, the EU, and Mexico until June 1, and has reached an agreement on permanent exemptions for Argentina, Australia, and Brazil, the White House announced on Monday.

The decision was made just hours before the temporary exemptions for those countries were set to expire.

The European Commission assessed on Tuesday that the U.S. is merely prolonging “market uncertainty” by extending the last-minute period of temporary exemption from customs duties on steel and aluminum imports for the EU and others.

>>> Steel production increased due to the introduction of tariffs

“The U.S. decision prolongs market uncertainty that is already affecting trade decisions,” reacted the European executive body in a statement, reiterating that the “EU should be completely and finally exempt from these measures as they cannot be justified on national security grounds.”

The White House agreed on Monday evening to extend the temporary exemption period from customs duties on steel and aluminum imports from Canada, Mexico, and the European Union until June 1, which was set to end on May 1.

“The administration is also extending negotiations with Canada, Mexico, and the EU for another 30 days. In all these negotiations, the administration is focused on quotas that will limit imports, prevent transshipment, and protect national security,” the White House statement said.

A source close to the negotiations revealed that there will be no further extensions of exemptions after June 1.

>>> Australia will be exempt from Trump’s steel and aluminum tariffs

Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum on March 23, but granted temporary exemptions for Canada, Mexico, Brazil, the EU, Australia, and Argentina. He also granted a permanent exemption on steel tariffs for South Korea.

The U.S. President is invoking the Trade Act of 1962, aimed at protecting U.S. steel and aluminum manufacturers.

The Trump administration argues that instead of tariffs, countries that are major exporters of aluminum and steel should agree on quotas to ensure security for U.S. manufacturers.

The terms of the agreements with Brazil, Argentina, and Australia, which avoided U.S. tariffs, are unclear, but South Korea received a permanent exemption on steel tariffs by agreeing to quotas that will reduce its steel shipments by about 30 percent compared to 2017 levels. Seoul is still subject to U.S. tariffs regarding aluminum.

However, Canada, Mexico, and the EU insist that they will not agree to quotas in order to obtain a permanent exemption from U.S. tariffs. Canada is the largest exporter of steel to the U.S., and the Canadian and U.S. industries are quite intertwined.