US Allies Line Up for Exemptions From Trump's Tariffs

From Japan and South Korea to Australia and Europe, officials lined up on Friday (09/03) to seek exemptions from President Donald Trump's tariffs on US steel and aluminium imports, while Chinese producers called on Beijing to retaliate in kind. (Reuters Photo/Peter Power)

By : Robin Emmott, Ruby Lian and Aaron Sheldrick | on 5:00 PM March 10, 2018
Category : International, Asia-Pacific

Brussels/Shanghai/Tokyo. From Japan and South Korea to Australia and Europe, officials lined up on Friday (09/03) to seek exemptions from President Donald Trump's tariffs on US steel and aluminium imports, while Chinese producers called on Beijing to retaliate in kind.

Tokyo and Brussels rejected any suggestion that their exports to the United States threatened its national security - Trump's justification for imposing the tariffs despite warnings at home and abroad that they could provoke a global trade war.

"We are an ally, not a threat," European Commission Vice President Jyrki Katainen said.

China's metals industry issued the country's most explicit threat yet in the row, urging the government to retaliate by targeting US coal - a sector that is central to Trump's political base and his election pledge to restore American industries and blue-collar jobs.

Trump signed an order for the 25 percent tariffs on steel imports and 10 percent for aluminium at the White House on Thursday to counter cheap imports, especially from China, which he described as "an assault on our country."

However, he said "real friends" of the United States could win waivers from the measures, which come into force after 15 days. In the event he exempted Canada and Mexico.

Brazil, which after Canada is the biggest steel supplier to the US market, said it wanted to join the exemption list and Argentina made a similar case.

Japan, the United States' top economic and military ally in Asia, was next in line. Chief Cabinet Secretary Yoshihide Suga told a news conference that Japan's steel and aluminum shipments posed no threat to US national security.

With Japan a major trade partner and international investor, Suga said that, on the contrary, they contributed greatly to employment and industry in the United States. Japan's steel industry body also expressed concern.

The European Union, the world's biggest trade bloc, chimed in. "Europe is certainly not a threat to American internal security so we expect to be excluded," European trade Commissioner Cecilia Malmstrom said in Brussels.

Malmstrom told reporters the EU was ready to complain to the World Trade Organization, and retaliate within 90 days. She will meet US Trade Representative Robert Lighthizer and Japanese Trade Minister Hiroshige Seko in Brussels on Saturday when she will ask whether the EU is to be included in the tariffs.

She won support from German Chancellor Angela Merkel. Shares in European steelmakers fell, although Germany's two biggest producers Thyssenkrupp and Salzgitter have insisted the impact on them will be limited.

Other officials at the EU, by far the biggest trading partner of the United States by value, have warned it could take counter-measures including European tariffs on US oranges, tobacco and bourbon.

Some products under consideration are largely produced in constituencies controlled by Trump's Republican Party. Brussels has reminded Trump that tit-for-tat trade measures deepened the Great Depression in the 1930s and in the 2000s cost thousands of US jobs when Washington imposed tariffs on European steel.

European industry associations called on Malmstrom to react to the tariffs. "The loss of exports to the US, combined with an expected massive import surge in the EU, could cost tens of thousands of jobs in the EU steel industry and related sectors," said Axel Eggert, head of steel association Eurofer.

In Sydney, Prime Minister Malcolm Turnbull said there is no case for imposing tariffs on Australian steel.

Legitimate Rights

Trade tensions between Washington and Beijing have risen since Trump took office last year. China accounts for only a small fraction of US steel imports, but its rapid rise to produce half the world's steel has helped create a global glut that has driven down prices.

Beijing vowed to "firmly defend its legitimate rights and interests." Tariffs would "seriously impact the normal order of international trade," the Commerce Ministry said.

China's steel and metals associations urged the government to retaliate, citing imports from the United States ranging from stainless steel to coal, agricultural products and electronics.

Last year, China imported 3.2 million tons of US coal, worth about $420 million and nearly five times the amount it took in 2016. Trump has championed coal exports as demand from power firms at home weakens.

The dispute has fueled concerns that soybeans, the United States' most valuable export to China, might be caught up in the row after Beijing launched an inquiry probe into imports of US sorghum, a grain used in animal feed and liquor.

South Korea, the third largest steel exporter to the United States and a strategic ally on the Korean peninsula, called for calm. "We should prevent a trade war situation from excessive protectionism, in which the entire world harms each other," Trade Minister Paik Un-gyu told a meeting with steelmakers.

While carrying a message to Washington to push forward a diplomatic breakthrough over North Korea, South Korea's national security office chief Chung Eui-yong asked US officials to support Seoul's request for a waiver, a presidential spokesman said.


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