Trump Extends Relief, Confusion as Allies Given Tariff Reprieve – Bloomberg

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President Donald Trump drew short shrift from key economic allies after he offered a second temporary exemption on metal-import tariffs rather than the permanent waiver most are demanding.

The U.S. said late Monday it would delay until June 1 import tariffs of 25 percent on steel and 10 percent on aluminum for the EU, Mexico and Canada. The White House also said it reached agreements-in-principle with Argentina, Australia and Brazil to remove the levies, which were introduced on national security grounds.

“The U.S. decision prolongs market uncertainty, which is already affecting business decisions,” The European Commission, the EU’s executive arm that coordinates trade policy for the 28-nation bloc, said in a statement. “The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.”

The president’s decision to delay the tariffs gives the White House breathing room as it weighs leaving the Iran nuclear accord later this month, prepares for disarmament talks with North Korea’s Kim Jong Un and as Treasury Secretary Steven Mnuchin leads a contingent of cabinet members to China this week to try to head off a brewing trade dispute between the world’s two-biggest economies. U.S. Trade Representative Robert Lighthizer has been sent to negotiate with countries seeking permanent waivers from the metals levies.

Trump dangled a permanent exemption as incentive to reach a tentative Nafta deal in the Americas, though talks continue with no immediate agreement in sight. Canada is the biggest steel exporter to the U.S.

The 30-day extension prolongs the standoff with the EU, the world’s largest trading bloc. European officials have said the U.S. tariffs violate international trading rules, and they have threatened to retaliate with levies on iconic American brands such as Harley Davidson motorcycles and Kentucky bourbon.

The EU and U.S. should “develop a positive trade agenda in the interests of both sides,” Steffen Seibert, German Chancellor Angela Merkel’s chief spokesman, said on Twitter Tuesday. “Fundamentally, the German government’s expectation remains a permanent exemption.”

To read more about how the EU will react to U.S. tariffs, click here

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