President Donald Trump announced Wednesday that the U.S. and the European Union have agreed to work to resolve the thorny issue of tariffs on steel and aluminum.
What did Trump say?
Trump declared that the U.S. and the EU had reached a “new phase” in their relationship, and that they would start working on getting to a point with “zero tariffs.” He also said:
We agreed today first of all to work together towards zero tariffs, zero nontariff barriers and zero subsidies for the non-auto industrial goods.
Jean-Claude Juncker, the president of the European Commission, said that the EU and the U.S. will “hold off further tariffs and reassess existing tariffs on steel and aluminum.”
On March 1, Trump announced that the U.S. would be imposing a 25 percent tariff on steel imports and a 10 percent tariff on all aluminum imports. In response, other nations have slapped retaliatory tariffs on a wide range of U.S. products.
The EU in particular has responded with retaliatory tariffs on a wide range of U.S. products, including bourbon, blue jeans, cigarettes, and motorcycles.
Tuesday evening, hours before the meeting was to take place, Trump tweeted that he hoped the U.S. and the EU could agree to “drop all Tariffs, Barriers and Subsidies.”
The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!
— Donald J. Trump (@realDonaldTrump) July 25, 2018
What's the impact of the tariffs?
General Motors has become the latest company to lower its profit forecasts and blame President Donald Trump's tariffs. The company is reportedly set to lose $1 billion this year, although some of this is due to the state of the national currencies in Brazil and Argentina.
GM is only the latest company to blame lower-than-expected profits on either the Trump administration's tariffs or on tariffs that other nations have imposed in response to the Trump administration's tariffs. Fiat Chrysler Automobiles, and Harley-Davidson have also adjusted their expectations down. Even America's largest aluminum producer, Alcoa Corp., has been hit with $15 million in extra costs, due to material that the American-based company produced in Canada and then shipped back into the U.S.
Whirlpool, which is also American-based, initially praised Trump administration tariffs on washing machines, which it saw as limiting the competition. However, Trump tariffs on steel and aluminum raised the cost of raw materials for the company, and ended up costing it $64 million.
Meanwhile, U.S. farmers have been hurt by both the rising cost of farm equipment caused by steel and aluminum prices, and tariffs imposed by other nations on American-grown items like soybeans and sorghum. To counteract this, the White House announced on Tuesday that it would be using a Depression-era program to offer $12 billion in emergency aid to farmers.