President Donald Trump has granted Canada, Mexico, and the European Union a 30-day extension to existing exemptions on steel and aluminum tariffs.
In addition, the U.S. has granted Australia, Argentina, and Brazil permanent exemptions from the tariffs. South Korea had already been given a permanent exemption to the steel tariffs (but not aluminum) as part of a separate trade deal with that country.
The prior exemptions that Trump had given to Canada, Mexico, and the E.U. were set to expire at 12:01 a.m. ET on Tuesday. Reuters cited sources that said that no additional extension would be granted if a trade deal was not signed before this 30-day period runs out.
On March 1, Trump announced that the United States would be slapping a 25 percent tariff on all steel imports, and a 10 percent tariff on all aluminum imports. This announcement was met with opposition both by nations hit with the tariffs, and fiscal conservatives who support free trade. One hundred eight Republican members of Congress signed a letter asking the president to reconsider.
When Trump imposed these tariffs, he did so citing security concerns. He called steel the “backbone of America,” adding “if you don’t have steel, you don’t have a country.”
Trump gave extensions to Canada and Mexico when the tariff was initially signed, until the North American Free Trade Agreement could be renegotiated. Trump said that if NAFTA is successfully renegotiated, “there won’t be any tariffs on Canada and there won’t be any tariffs on Mexico.”
But he also stated that “if we don’t make a deal on NAFTA,” the tariffs would go into effect for those nations as well.
Trump also suggested that other nations could also be exempt from the tariffs. “America remains open to modify or remove tariffs on individual nations” if those nations are determined to not be a security threat, Trump said.
Have the tariffs had any effect yet?
Tariffs on steel and aluminum have caused the prices of both of these products to rise. This in turn has led to a spike in the cost needed to manufacture farming equipment, a cost which has then been passed on to farmers.
China has also retaliated against U.S. tariffs with more than 100 proposed tariffs of its own, and a 179 percent tariff on sorghum imports from the U.S. – an industry worth around $1 billion a year.
The European Commission said that there needs to be a permanent fix soon. In a statement, the commission said:
“The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.”