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China Threatens Trade Retaliation against US Agricultural Commodities

14 March 2018

Allies that convince the Trump administration that their steel and aluminum exports don't threaten American industry will be spared, the President said. "It's also going to end up costing the American consumer".

The White House said there will be a mechanism for USA parties to apply for exclusion of specific products based on demand that is unmet by domestic production or on specific national security considerations.

"Pretty much all of you will be immediately expanding if we give you that level playing field, if we give you that help", said Trump in announcing 25 percent tariffs on steel imports and a 10 percent surcharge on foreign aluminum.

The president says he will exempt Canada and Mexico as "a special case" while negotiating for changes to the North American Free Trade Agreement.

Yet at no time has there been a suggestion that close allies Canada and Mexico constitute any kind of security risk to the U.S.

Canada exported a combined $15 billion of the two metals to the US last year, so a tariff would bite deep and likely prompt some sort of retaliatory tariff on USA goods imported into Canada.

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"Europe is certainly not a threat to American internal security so we expect to be excluded", European trade commissioner Cecilia Malmstrom said in Brussels.

The auto industry once again warned the tariffs may harm USA economic growth, jobs and wallets. The 15% duty was first set for a six-month period in October 2015.

"We have some friends and some enemies where we have been tremendously taken advantage of over the years on trade and on military", he said.

GM said it also expected to minimize any long-term negative impact as a result of the tariffs.

Two dozen conservative groups, including the Club for Growth, FreedomWorks and the National Taxpayers Union, urged Trump to reconsider, writing in a letter that the tariffs would be "a tax on the middle class with everything from cars to baseball bats to even beer". Under the President's proposal, if a manufacturer imports $1 million of steel, they now have to pay an additional $250,000 to the federal government.

"The American aluminum and steel industry has been ravaged by aggressive foreign trade practices", Trump said at a signing ceremony at the White House, according to the Associated Press. But President Trump's tariff exemption is hardly a gift horse and there's no telling whether an all-out trade furor between the US and its top strategic allies will ensue.

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Canada's former Ambassador to the United States believes the country has escaped "the guillotine" with Donald Trump's decision to hold off on applying his country's planned steel and aluminum tariffs. United States Steel Corp. said Wednesday said it would bring a blast furnace back online at a plant in Granite City, Ill, and recall 500 workers.

Trump also pledged to impose "reciprocal tax" on countries like China and India if they do not match America's tariff.

Trump has championed coal exports as demand from power firms at home weakens.

With national security as the primary issue, it would be hard to apply the tax to South Korea and Australia, meaning that they could ultimately land on Russian Federation more than nearly any other country, said Levy, now at adjunct professor at Northwestern University. "We want our workers to be protected and we want, frankly, our companies to be protected".

The plan has been widely criticized by Republicans, panned by corporate America, shaken global financial markets, and prompted the resignation of Trump's top economic adviser, Gary Cohn, this week.

In fact, Mexico imports more than it exports and hence has a trade deficit. If the ill-fated direction toward trade tariffs for Canadian steel and aluminum is forged, retaliation will be necessary.

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Trump kept Canada and Mexico as potential tariff targets because that served USA interests in winning concessions in ongoing NAFTA negotiations.

China Threatens Trade Retaliation against US Agricultural Commodities