Trump postpones steel tariff decision for Canada, EU, Mexico

President Donald Trump has postponed the imposition of steel and aluminium tariffs on Canada, the European Union and Mexico until June 1, and has reached agreements for permanent exemptions for Argentina, Australia and Brazil, the White House said on Monday (April 30).

The decisions came just hours before temporary exemptions from the tariffs on these countries were set to expire at 0401 GMT on Tuesday.

In a statement, the White House said that the details of the deals with Brazil, Argentina and Australia would be finalised shortly, and it did not disclose terms.

"The administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days. In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security," the White House added.

No more extensions

A source familiar with the decision said that there would be no further extensions beyond June 1 to stave off tariffs.

Trump on March 23 imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminium in March, but granted temporary exemptions to Canada, Mexico, Brazil, the EU, Australia and Argentina. 

He also has granted a permanent exemption on steel tariffs to South Korea.

Trump has invoked a 1962 trade law to erect protections for US steel and aluminum producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China.

The tariffs, which have increased frictions with US trading partners worldwide and have prompted several challenges before the World Trade Organization, are aimed at allowing the two US metals industries to increase their capacity utilisation rates above 80 percent for the first time in years.

Extension not enough

The European Union says one-month tariff extension on EU imports of steel and aluminium is bad for business and that the bloc should be granted a permanent exemption.

The 28-nation EU said the US decision "prolongs market uncertainty, which is already affecting business decisions."

The EU has already said it will retaliate if the Trump administration imposes the tariffs.

"As a longstanding partner and friend of the US, we will not negotiate under threat," the EU said, adding that a trans-Atlantic agreement "has to be balanced and mutually beneficial."