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Trump's tariffs: What they are and how they would work

03 Juin 2018

The US Dollar has recovered its earlier losses following the announcement that the Trump administration would be moving forward with tariffs on aluminum and steel imports from its major trading partners, including Canada, Mexico, and the European Union.

The Canadian government released two lists this week of American products, proposing a 25 per cent tariff on the first list and 10 per cent on the second.

Canadian Prime Minister Justin Trudeau called the tariffs "unacceptable."

Just a week ago, USA businesses may have thought they could breathe a sigh of relief, as the US and China hit pause on an impending trade war.

"That Canada could be considered a national security threat to the United States in inconceivable".

The prospect of a global trade war has roiled financial markets this past week even if they were back in positive territory on Friday due to upbeat USA economic data.

"This is not about the American people", Trudeau said of his retaliatory tariffs, placing blame squarely on the White House.

'But if you take the European Union and you see the kind of tariff they change, and then we don't, that's called not fair trade.

The EU, Canada and Mexico learned yesterday that they will not be exempted from the decision of US President Donald Trump to slap tariffs of up to 25 per cent on metal imports.

While President Trump's intention with tariffs may have been to boost job growth in the US, tit-for-tat trade measures could have the opposite effect and threaten 2.6 million American jobs.

Mexico announced retaliatory tariffs Thursday, targeting imports from the United States that include flat steel, lamps, pork products and prepared meat products, apples, grapes, cranberries and cheeses - goods chosen for maximum impact in areas that have supported Trump. "Do timber and lumber in US?"

The EU said it would challenge the move at the World Trade Organisation. Mexico said it would retaliate with "equivalent" measures against USA products, including pork legs, apples, grapes, cheese, steel and other goods.

The Canadian tariffs, which foreign minister Chrystia Freeland said are proportional to the United States duties, will be applied to and aluminum as well as consumer products from July 1. Well, they have a $2 billion surplus on steel with us.

"Canada knows this is the big ball game and they have said from the very beginning they're not going to yield to pressure tactics".

North Country Congresswoman Elise Stefanik is blasting President Trump's decision to implement tariffs on Canadian steel and aluminum.

"Rather than creating a common front to address widely held concerns about China's trading and economic practices, Trump has succeeded in alienating key US allies and undercutting broader external pressure on China", he said.

Malmstrom said the Trump measures "will cause a lot of damage to our steel and aluminum industry".

Trump's latest remarks will create even more uncertainty about the future of the 24-year-old pact.

She says "the US, EU and United Kingdom are close allies and have always promoted values of open and fair trade across the world".

"In a connected, global economy, customs barriers don't benefit anyone, including the United States", the VDA federation said.

Trump's tariffs: What they are and how they would work