US extends steel, aluminum tariff exemption for EU, Canada, Mexico

WASHINGTON - The White House on Monday announced that the steel and aluminum tariff exemptions for EU member countries, Canada and Mexico will be extended until June 1 in order to give "a final 30 days" for them to reach agreements over trade negotiations.

"In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security," US President Donald Trump said in a statement Monday.

Washington also agreed to exempt Argentina, Australia and Brazil as it has reached agreements with these countries. The White House said the details of these agreements will be finalized shortly.

As South Korea has agreed to follow a quota for its steel exports to the United States as well as other measures to reduce excessive steel capacity, it will be exempt from the steel tariff but will face additional tariff on aluminum exports to the United States, which will take effect on May 1.

Amid widespread dissent in business groups and trading partners around the world, Trump signed proclamations in March to impose 25-percent tariff on imported steel and 10 percent on aluminum, which took effect on March 23.

The White House then provided temporary exemptions for EU member states as well as Argentina, Australia, Brazil, Canada, Mexico and South Korea, and had to decide whether to extend them until the end of Monday.

The United States is using a decades-old law to impose the tariffs on the ground of national security, which has drawn strong opposition from the domestic business community and US trading partners.

Last week, French President Emmanuel Macron and German Chancellor Angela Merkel came to Washington to work out trans-Atlantic trade issues but left without results.

China has requested consultations with the United States on the tariffs at the World Trade Organization and the EU has sought to join the consultations.

Though the EU is temporarily exempt from the tariffs, if the exemption is not continued, its exports would be impaired significantly, it said last week.

In 2017, the 28-nation bloc exported 5.99 billion US dollars worth of steel products to the United States, and 1.25 billion dollars of aluminum, making it the top exporter of steel to the United States and the fifth largest aluminum exporter.

The unilateral move by Washington could push world trade into a lose-lose situation and undermine the trading system, said Chad Bown, a senior fellow and trade expert at the Peterson Institute for International Economics.