Washington: US President Donald Trump today signed two proclamations that impose 25% tariff on imported steel and 10% on aluminium, a move that is likely to foment a global trade war. The contentious tariffs come into effect in 15 days.
Though primarily targeted at the massive steel and aluminium dumping by China, only two countries Canada and Mexico have been exempted from the new import tariff, that too till the time the North America Free Trade Agreement (NAFTA) negotiations are complete.
Other countries would have to negotiate with US Trade Representatives (USTR) if they want exemptions from the steel and aluminium import tariff, Trump said as he vowed to slap “reciprocal tariffs” on countries like China and India if they do not match America’s tariff.
The import tariffs are likely to face retaliation from America’s top trading partners, the European Union and China.
Trump signed the proclamations in presence of steelworkers from Pennsylvania, Vice President Mike Pence, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, United States Trade Representative Robert E Lighthizer and economist Peter Navarro, architect of his steel and aluminium policy.
Reiterating that countries including America’s “friends and allies” have been fleecing the US economy and taking away jobs for decades, Trump pledged to impose “reciprocal tax”.
“We’re going to be doing a reciprocal tax program at some point so that if China is going to charge us 25% or if India is going to charge us 75% and we charge them nothing. They are 50, they are 75 or they are 25, we are going to be doing the same numbers. It’s called reciprocal. It’s a mirror of tags. So they charge us 50, we would charge them 50,” Trump said in his remarks before signing the two proclamations.
The US President said the stage for the imposition of reciprocal tax has been set in the first year of his administration.
“They will charge us 50, we charge them nothing. Doesn’t work. So that’s called a reciprocal tax … mirror attacks. We will be going to be doing a lot of them,” Trump said.
“American companies have not been treated fairly and some American companies frankly have taken advantage of it and gone to other countries and developed in Mexico, massive automobile plants, taking our jobs away and taking our companies down to Mexico to make the cars and then they send them right across the border without tax, without anything,” he said.
Trump said a strong steel and aluminium industry is vital to US national security.
“Absolutely vital. Steel is steel. You don’t have steel. You don’t have a country. Our industries have been targeted for years and years. Decades, in fact, by unfair foreign trade practices, leading to the shuttered plants and mills, the laying-off of millions of workers, and the decimation of entire communities. That’s going to stop,” he said.
Trump said the “unfair” foreign trade practices were not merely an “economic disaster” but a “security disaster” and by signing the two proclamations he was defending America’s national security.
“We want to build our ships, we want to build our planes, we want to build our military equipment with steel, with aluminium from our country. And now we’re finally taking action to correct this long-overdue problem. It’s a travesty,” he said.
Stating that he wants a lot of steel coming to the US, Trump asserted that he wants it to be “fair”.
“We want our workers to be protected and we want, frankly, our companies to be protected. By contrast, we will not place any new tax on the product made in the USA. So there’s no tax if a product is made in the USA. You don’t want to pay tax? Bring your plant to the USA. There’s no tax,” he said.
The action being taken, the president said, follows a nine-month investigation by the Department of Commerce, documenting a growing crisis in US steel and aluminium production that threatens the security of the country. It is also bad for the US economically and with jobs, he rued.
Trump called the “aggressive” foreign trade practices an “assault on our country”.
“The American steel and aluminium industry has been ravaged by aggressive foreign trade practices. It’s really an assault on our country. It’s been an assault. They know better than anybody. Other countries have added production capacity that far exceeds demand. And flooded the world market with cheap metal that is subsidised by foreign governments, creating jobs for their country and taking away jobs from our country,” he said.
Referring to a tweet by Tesla head Elan Musk, Trump said China charges 25% duty on American cars whereas it is just 2.5% on import of Chinese cars into the United States.