Coverage: Tariffs on Mexico, Canada and EU start a trade war
President Donald Trump on Thursday imposed tariffs on imported steel and aluminum from the European Union, Canada and Mexico, triggering immediate retaliation from U.S. allies and protests from American businesses and farmers.
David J. Lynch, Josh Dawsey and Damian Paletta of The Washington Post had the news:
The tariffs — 25 percent on steel and 10 percent on aluminum — take effect at midnight Thursday, marking a major escalation of the trade war between the United States and its top trading partners.
Stung by the U.S. action, the allies quickly hit back. The E.U. said it would impose import taxes on politically sensitive items like bourbon from Senate Majority Leader Mitch McConnell’s home state of Kentucky. Mexico said it would levy tariffs on American farm products, while Canada zeroed in on the same metals that Trump had slammed.
Capping the extraordinary day, Canadian Prime Minister Justin Trudeau revealed that he had rejected an ultimatum from Vice President Pence that any new North American trade deal be renewed at five-year intervals.
“Today is a day when the Trump administration pretty much signaled it is throwing out the rule book on trade,” said Rufus Yerxa, head of the National Foreign Trade Council and a former U.S. negotiator. “I’ve been dealing with this stuff for four decades and I’ve never seen anything like this.”
Jeremy Diamond and Julia Horowitz of CNNMoney.com reported that prices could rise for products Americans buy:
Trump’s decision could raise prices for Americans on a range of everyday products. It could also place the United States in a trade dispute on more than one front. The administration is separately moving ahead with tariffs on Chinese goods.
Trump imposed the steel and aluminum penalties under a 1962 law that gives the president broad power to increase or reduce tariffs on goods deemed critical to national security.
“We take the view that without a strong economy, you cannot have strong national security,” Ross told reporters.
Trump’s announcement lifted American steel and aluminum stocks because those companies stand to benefit from penalties against their foreign competitors. U.S. Steel climbed 3%. But the broader market sank because of trade war fears. The Dow fell about 200 points.
Ana Swanson of The New York Times reported that the Trump administration believes imports hurt natural security:
Allies have vowed to challenge the legal statute the Trump administration used to roll out the tariffs, which is related to national security.
The Trump administration has argued that imports have weakened the country’s industrial base, and, by extension, its ability to produce tanks, weapons and armored vehicles. “We take the view that without a strong economy, you can’t have strong national security,” the commerce secretary, Wilbur Ross, said Thursday.
The European Union and Canada have objected strongly to the idea that they pose any kind of threat to national security, citing their close alliances and defense agreements with the United States. Jean-Claude Juncker, the president of the European Commission, called the steel and aluminum tariffs announced by the White House on Thursday “protectionism, pure and simple.”
With the tariffs set to go into effect at midnight, all three allies are readying their counterattacks.