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Japan trade minister calls for calm heads over United States tariffs

12 March 2018

US PRESIDENT Donald Trump has confirmed he and Malcolm Turnbull are working on an agreement to provide Australia an exemption from steel or aluminium tariffs.

European Union president Donald Tusk said "trade wars are bad and easy to lose", directly rebuffing Trump's claim last week they were "good and easy to win".

He said, "What strikes me is whatever convictions you have about trade, we are convinced that disputes should be discussed and resolved in a multilateral framework".

"The exact nature of the (EU) steps will be decided after a close analysis of the American measures."Separately, Germany's transatlantic coordinator, Juergen Hardt, told Reuters the US government should have exempted its European allies from punitive tariffs imposed against steel and aluminium imports that were primarily aimed at China".

However, he said "real friends" of the USA could win waivers from the measures, which come into force after 15 days.

NAFTA's legal structure, which offers its members tariff-free access to each other's markets, was a major complication in applying the tariffs to Canada and Mexico, according to a prominent Washington trade lobbyist, who spoke on condition of anonymity due to the sensitivity of the matter.

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The tariffs were aimed at China, which has been dumping cheap, subsidized steel into the US and undercutting American producers who have been forced to slash production and jobs.

Japan, the US's top economic and military ally in Asia, was next in line.

"Europe is certainly not a threat to American internal security so we expect to be excluded", Malmstrom told reporters before speaking at a conference in Brussels.

The European Union, the world's biggest trade bloc, chimed in.

EU Commissioner Cecilia Malmstrom, who coordinates policy for the world's biggest trading bloc, said she shared USA concerns about overcapacity in the steel sector but did not believe in tariffs as a way to solve the problem. He was apparently referring to the European Union threats of retaliation.

The EU's trade chief Cecilia Malmstrom will meet with U.S. Trade Representative Robert Lighthizer in Brussels on Saturday but the EU executive said the talks would not solve all the problems.

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The EU threatened an "arsenal" of retaliatory measures when the tariffs were first proposed, including imposing import tariffs on products made in red districts.

In the days leading up to Thursday's announcement, the biggest trade move of Trump's presidency, key industry players and trading partners were still in the dark about the contours of the plan.

He added that national security was an important part of that deal and, if a deal is made, "this will figure into the deal and we won't have the tariffs on Canada or Mexico".

Steel imports will be hit with a 25% tariff and aluminum imports with a 10% tariff.

The new U.S. action will deal a heavy blow to Korean steel companies and they need to work together to minimise the impact by devising measures like raising competitiveness and diversifying export markets.

Prime Minister Justin Trudeau is heading to Canadian steel country this week on a three-day tour created to shore up the industry.

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Beijing vowed to "firmly defend its legitimate rights and interests".

Japan trade minister calls for calm heads over United States tariffs