The Trump administration on Thursday followed through on its threats to slap tariffs on major U.S. allies, ending exemptions from steel and aluminum tariffs for the European Union, Canada, and Mexico.
“We take the view that without a strong economy, you can’t have strong national security,” Secretary of Commerce Wilbur Ross said as he announced the new policy in Paris. “The president’s overwhelming objective is to reduce our trade deficit.”
Mexico and Canada were exempted at first as the U.S. renegotiates the North American Free Trade Agreement (NAFTA). But Ross said those exemptions had to be rescinded as negotiations “are taking longer than we hoped.” The new tariffs will go into effect on Friday.
Mexico, one of the top exporters of steel to the U.S., announced “equivalent measures” on “various products,” including flat steel, pork, sausage, fruit, and cheese in a statement. “Mexico reiterates its position against protectionist measures that affect and distort international commerce in goods,” the statement said.
The E.U. is also preparing to levy reciprocal tariffs.
“Today is a bad day for world trade,” said E.U. trade commissioner Cecilia Malmström in a statement. “We did everything to avoid this outcome.”
“We look forward to continued negotiations with Canada and Mexico on one hand and with the European Commission on the other hand as there are other issues we need to get resolved,” Ross told reporters.
The move caused the Dow to drop about 200 points over trade war-anxiety, but American steel and aluminum stocks rose slightly across the board.
The White House also on Tuesday imposed 25 percent tariffs on $50 billion worth of Chinese imports, which will kick in during the next month.