Trump Holds Firm On Tariffs
President Trump has refused to exempt Australia and other allies from his tough steel and aluminium tariffs which he signed into law Friday morning.
Tariffs could be modified for other countries, such as Australia, which Trump called a “long-term partner” at a cabinet meeting.
But result Australia and other allies will be forced to beg the Trump administration for an exemption under the punitive tariffs that start in within the next 15 days
It raises the possibility that some allies such as the EU or Japan could be excluded while others such as South Korea were not.
The news saw Wall Street lose ground in the last 20 minutes of trading after investors had played it safe for most of the day. Markets in Europe and Asia had earlier risen ahead of the announcement.
The tariff regime was softened at the last minute to spare Canada and Mexico, only temporarily, while the US and its neighbours renegotiate the North American Free Trade Agreement.
The decision effectively turns some of America’s closest allies - such as Australia, Japan and South Korea - into beggars.
The tariffs are expected to draw retaliation from the EU and other steel producers and heighten fears of a descent into a trade war.
Mexico has rejected any linkage to NAFTA in robust terms on Thursday. Mexico’s Economy Minister Ildefonso Guajardo telling Reuters, “Under no circumstance will we be subject to any type of pressure.”
And Canadian Trade Minister Francois-Phillippe Champagne told Reuters his country would not accept any duties or quotas from the United States.
The decision by the President comes ahead of a special election next week in a Pennsylvania congressional district that includes many communities once dependent on the steel industry. Trump won the district easily in the 2016 election, but polling this week shows the Democrat candidate is running neck and neck with the Republican.
The move came as Japan, Australia, Canada and eight other Pacific countries signed a reworked trade deal, promising to push back against protectionist forces. Mr Trump pulled the US out of the Trans-Pacific Partnership as one of his first acts as president. The 11 remaining countries have since renegotiated the deal.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.