On May 1, the Trump administration extended negotiations on steel and aluminium tariffs for 30 days with Canada, the EU and Mexico, and reached a deal in principle with Argentina, Brazil and Australia. With the extension now over, US companies buying EU steel will now have to pay a 25% tax, while aluminum has a 10% tariff after the Trump Administration cited national security interests. The EU has decided to launch counter-tariffs on US products, including bourbon whiskey, jeans, Harley Davidson motorcycles and steel, starting from the end of June. And while the United Kingdom is currently included in the EU tariffs deal, they hope to negotiate an exemption once Brexit is finalized. As of Tuesday this week, Mexico has retaliated by imposing a series of tariffs against US exports to its market valued at $3 billion. They’ll hike the price of products including pork, apples, potatoes, bourbon as well as different types of cheese. The tariffs range between 15% and 25%, and could raise the price of US goods by that amount, cutting deeply into US exports to its neighbor. “It is necessary and urgent to impose measures equivalent to the measures implemented by the US,” said the statement issued by the Mexican government.
The tariffs will take center stage at the G7 meeting in Canada this week where Theresa May, Great Britain’s prime minister, and the G7 will urge Trump to re-think US steel tariffs. As reported today, “the prime minister will be joined by her counterparts from France, Germany, Italy, Canada, and Japan as they establish a plan to convince President Trump to halt the punitive tariffs on steel and aluminum exports to the US.”
It is still too early to understand the full impact of these new tariffs – on both sides. Could it mean the loss of US jobs in the steel and aluminum industry or will there be growth? How will US and foreign consumers be impacted by these tariffs? Will it strengthen US national security, cited by the Trump Administration as a primary reason behind imposing the tariffs? While there is uncertainty regarding the US administration’s next move, there does seems to be certainty among the other world leaders that the impact of the tariffs will be a negative one. As baseball season gets fully underway here in the US, everyone will be watching to see who will be next to “batter up!”