Just how much steel and aluminum are we talking about?
The Trump administration has begun imposing tariffs on imports of steel and aluminum today, but several countries are exempted temporarily until May 1, including the EU member countries, Argentina, Australia, Brazil, Canada, Mexico, and South Korea. The administration may still apply quotas on those exempted countries to prevent a flood of foreign steel and aluminum in the U.S. market, per the White House.
Why it matters: After railroading past a number of his advisors, Trump announced the tariffs on imports of steel (at 25%) and aluminum (at 10%) earlier this month, citing national security concerns, and in particular, China, but said there would be no exemptions. The imports from China are just a fraction compared to what these other countries trade with the U.S., and these exemptions could help the administration dodge a bullet for now.
- The EU was planning tit-for-tat tariffs on the U.S., and could have expanded them beyond steel and aluminum.
- South Korea’s trade minister had announced it would seek new markets for steel.
- The U.S. imports the most steel and aluminum from Canada. The U.S. imports more steel from exempted countries Canada, Brazil, South Korea, and Mexico each than it does with China.
China is still hitting back: China announced reciprocal tariffs on $3 billion of imports from the U.S., including on fruit, pork, wine, seafood, and more than 100 other items.
On the exemption conversations: The White House said in a presidential proclamation issued Thursday night that the countries are discussing with the U.S. “satisfactory alternative means to address” the national security threat those imports might pose, up until May 1.
- Why exempt them, per Trump: “Each of these countries has an important security relationship with the United States” and the best way forward is to continue conversations exempt them “at least at this time.” Trump left the door open for other countries to negotiate exemptions.
- Canada and Mexico are exempt from the tariffs, so long as they come to an agreement on NAFTA with the U.S., which just rounded out its seventh round of talks earlier this month. Canada and Mexico both have pushed back that NAFTA and the tariffs issue are not linked.
Bottom line: The extent of the effect of the tariffs has yet to be set in stone — the exempted countries are still discussing with the administration what they will ultimately do about their exports to the U.S., and other countries still have the opportunity to either receive exemptions or hit back with reciprocal tariffs.
- An administration official tells Axios the U.S. is indeed at this time “in discussions with several other countries" on this front.
Go deeper... Trade wars: The effect of Trump’s tariffs