Update: Mr Trump will keep the Europeans guessing—the US president has delayed today’s decision until June 1. The White
Update: Mr Trump will keep the Europeans guessing—the US president has delayed today’s decision until June 1.
The White House will today announce whether it will continue to temporarily or permanently exempt the EU from a 25% tariff on steel and 10% tariff on aluminium imports.
In March, President Donald Trump announced the US would temporarily exempt the EU, Canada, Mexico and other partners from the sanctions while trade negotiations over product exemptions and quotas were ongoing.
President Trump’s tariffs are intended to target China, but the EU is poised to be the largest loser. While it is estimated Chinese firms will only lose a cumulative $400 million, EU firms would lose at least $2.4 billion in total. The imposition of these measures against the EU risks undermining transatlantic ties and has stoked fears of a trade war, with the European Commission threatening to retaliate with $3.4 billion in trade penalties on US industries.
The US is very likely to extend the EU exemptions today. However, expect the Trump administration to continue threatening a future revocation of exemptions in an effort to gain concessions from the EU regarding quotas and product exemptions. The administration is very unlikely to go as far as jeopardising the historic US-European security and economic relationship by letting the exemptions expire.