Nothing Good Happens After Midnight: Canada, Mexico and the EU Hit with Tariffs on Steel and Aluminum
This morning, on May 31, 2018, U.S. President Donald Trump announced that Canada, Mexico and the European Union would no longer benefit from a tariff exemption on steel and aluminum. Canada and Mexico were initially exempt from the duties announced on March 8th, pending negotiations of the North American Free Trade Agreement. The exemptions were set to expire on June 1st, 2018. Commerce Secretary Wilbur Ross said insufficient progress had been made in the North American Free Trade Agreement negotiations and in separate talks with the EU to warrant extensions of the temporary exemptions or permanent exclusions for those countries.
Tariffs of 25 percent on steel and 10 percent on aluminum imports from Canada, Mexico and the EU will take effect at midnight tonight.
Canada has not yet released a statement on whether retaliatory measures would be taken. However, when there were first discussions on the possibility of tariffs on steel and aluminum, Foreign Affairs Minister Chrystia Freeland indicated that Canada would take “responsive measures to defend its trade interests and workers” should restrictions be imposed on Canadian steel and aluminum products.
Tariff exemptions continue to apply to Argentina, Brazil, and Australia, which have all agreed to restrict exports of steel and aluminum to the United States. Tariff exemption for South Korean steel also continues to apply due to the country’s undertaking to restrict steel exports to the US.
Tereposky & DeRose advises and represents private sector clients — including industry associations, large corporations, and small and medium-sized businesses — as well as government entities on the full range of issues arising in cross-border trade. Should you have any questions regarding this matter, we are at your disposal.