Economy

Trump tariffs are about national security: Peter Navarro

Trump tariffs are about national security: Peter Navarro

Commerce Secretary Wilbur Ross says the tariffs - 25 percent on imported steel, 10 percent on aluminum from Canada, Mexico and the European Union - take effect from Friday. It represents an apparent breakdown in Trudeau's efforts to find common ground with the tough-talking president.

A statement from Mexico's economy ministry says the US use of a national security justification is improper and that the tariffs affect strategic sectors for North America, including automotive, aerospace and electronics.

Business leaders in Canada and the USA predicted dire economic consequences as result of the decision, which was derided on both sides of the Atlantic. On May 31st Justin Trudeau, Canada's prime minister, spoke of his offer to meet Mr Trump to resolve their differences and finalise a NAFTA deal.

Europe and Mexico reacted to the US move with their own lists of tariffs on American products, raising fears of a trade war among allies.

Canada, the largest supplier of steel to the United States, said it will impose tariffs covering C$16.6 billion ($12.8 billion) on USA imports, including whiskey, orange juice, steel, aluminium and other products.

European and Canadian leaders also reacted "swiftly and angrily" to Trump's decision.

The U.S. tariffs on its closest allies, first touted by President Donald Trump in March, drew condemnation from Republican lawmakers and the country's main business lobbying group and sent a chill through financial markets.

Industry representatives were reluctant to comment publicly, with several saying it was too early to know for certain how they would be affected by the US tariffs - as well as the retaliatory measures introduced later in the day by the Trudeau government.

After the US action, the European Union announced plans to bring its case against the USA tariffs to the WTO on Friday.

"I think the key going forward is to take this time to make sure that it works for the parties most directly affected and to get those measures in place as soon as we can", he said.

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The US tried to use the threat of sanctions as "leverage to obtain concessions" from the European Union, but "this is not the way we do business", especially between longstanding allies, she said.

EU members have given broad support to a European Commission plan to set duties on €2.8bn ($3.4bn) of U.S. exports if Washington ends tariff exemptions.

"What we have is about 15 counties in the aluminum space and about 20 in the steel space who basically are sending a flood of imports into this country", he said. "Mexico has stated repeatedly that this type of measure, based on national security, is neither appropriate nor justified".

The long-threatened tactic is sure to cast a pall over the G7, with some observers saying a G6-plus-one scenario is already shaping up. But the two sides could not reach an agreement. "That doesn't necessarily mean that it derails other discussions at all", said Ross.

The European Commission's president, Jean-Claude Juncke, said Trump's action amounted to trade protectionism and Europe would respond.

Speaking to Sky News, the International Trade Secretary said he would not rule out retaliatory counter measures as "you can not look at every global issue through the prism of Brexit".

Donald Trump risks isolating the U.S. from its allies with his latest move. "He doesn't seem to get that his bluster and his bullying are costing people real jobs - in his own country, in Canada and in Ontario", Wynne said.

"I believe the real challenge on NAFTA will be Mexico". That's a strong number, especially considering that we're in the late stages of an economic expansion, when it's typically hard to find workers.

Speaking to BI later on Friday morning, Gardiner said: "Holding hands with President Trump has not stopped him attacking our steelworkers' jobs".

"This is Trump versus the world, rather than Trump versus Canada".


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