Auto Industry Reacts to Trump’s Proposed Steel and Aluminum Tariffs

Canada is the largest USA trading partner and previous year shipped $7.2 billion worth of aluminum and $4.3 billion of steel to the United States. But he added, “If they aren’t going to make a fair NAFTA deal, we’re just going to leave it this way”. Massive relocation of companies and jobs.

“The idea of imposing steel or aluminum tariffs of any kind is an affront to economic freedom”, stated Club for Growth President David McIntosh said in a statement.

China, which produces almost half of the world’s steel exports, is the most obvious target of Trump’s move.

“Our country on trade has been ripped off by virtually every country in the world, whether its friend or anybody — China, Russia, people we think are wonderful, the European Union“, he said.

Investors should be prepared for a volatile trading week as an internal battle continues to wage in the USA over the implementation of these tariffs.

Canada and Mexico have been fighting back against a series of protectionist USA demands at the NAFTA table.

The tit-for-tat between the U.S. and EU has already had an impact on European auto makers, whose share prices dropped on Monday following a threat by Trump to tax their vehicles.

Canadian Prime Minister Justin Trudeau, left, and Mexican President Enrique Pena Nieto make a toast following a meeting at the presidential palace in Mexico City on October 12, 2017.

The US President is also facing resistance from politicians in his own country, with a number of Republican politicians typically in Trump’s camp speaking out against the initiative. “We’re going to build our steel industry back, we’re going to build our aluminum industry back”. “#AMERICA FIRST”, the President concluded his tweetstorm.

He has said he plans to impose a 25 percent tariff on steel imports and 10 percent on aluminum, possibly this week.

Presidents Johnson, Nixon, Carter, Reagan and George W. Bush all imposed tariffs or took other measures to protect the US steel industry.

The plan has sparked an outcry among American allies such as Canada, the European Union, Mexico and Australia, as well as China.

The European Union has said it is drawing up measures against leading United States brands like Harley-Davidson and Levi’s jeans.

“But blanket tariffs that also sweep up fairly traded steel and aluminum, especially with trading partners like Canada and Mexico – they should be excluded”.

The president says Canada and Mexico will not be spared from his plans for special import taxes on steel and aluminum, but he is holding out the possibility of later exempting the longstanding friends if they agree to better terms for the U.S.in a revised North American Free Trade Agreement.

The steel and aluminum tariffs were recommended by Commerce Secretary Wilbur Ross after a report from his agency concluded that the glut of the metals on global markets was a threat to U.S. national security.

Josh Bolten, chief executive officer of the influential Business Roundtable and former chief of staff to President George W. Bush, described the tariffs as “a huge mistake” on the “Fox News Sunday” programme.

Ferdinand Dudenhöffer from Germany’s Center for Automotive Research told Deutsche Welle (link in German) said that while slapping tariffs on imported cars would hurt foreign vehicle makers, it would hurt USA automakers more, as they produce a lot of cars outside the United States, mainly in Mexico. When else does the White House talk like that about anything?

Canada and Mexico had prepared a series of compromise proposals on the key autos issue for the seventh round of NAFTA, but were unable to present them after the U.S.’s lead negotiator on the file, Jason Bernstein, was called back to Washington for hasty consultations with the USA auto industry.

The latest round of negotiations was expected to wrap up yesterday in Mexico City.