Published: Tue, March 13, 2018
World | By Paul Elliott

Trump Says Australia to Secure Exemption From US Tariffs

Trump Says Australia to Secure Exemption From US Tariffs

As with many of Trump's economic ideas, the tariffs were driven by the misguided notion that all global trade is a zero-sum game, wherein any benefit derived by a foreign partner must by its very nature have come at America's expense.

Directly subjecting Australia to US President Donald Trump's proposed steel and aluminium tariffs would have been dire for the country's resources sector, according to more than half (63%) of respondents in Financial Standard's weekly spot poll.

"Secretary of Commerce Wilbur Ross will be speaking with representatives of the European Union about eliminating the large Tariffs and Barriers they use against the United States of America".

He once again threatened India and China with such a tax on March 9, saying, "We're going to be doing a reciprocal tax program at some point so that if China is going to charge us 25 per cent or if India is going to charge us 75 per cent and we charge them nothing". "While we are grateful that our trading partners, Canada and Mexico, are now exempt, it is our view that these tariffs will quickly become a tax on the fix and maintenance of vehicles, a tax that will ultimately be paid for in higher fix prices by the American auto owner". It is clear the willing to risk ruffling a few feathers to achieve its goals - the Paris Agreement previous year being one example - but would a trade war with the a battle the US can't win?

The decision to slap hefty tariffs on imports of steel and aluminum, which the White House made formal on Thursday, has roiled global markets, angered longtime trading partners and prompted threats from the president's own party to stop the tariffs through legislation.

And Douglas Porter, chief economist at the Bank of Montreal added, "We're pretty consistently flabbergasted that Canada is at the top of the hit parade of trade villains in Trump's eyes".

The EU and Japan held crunch talks with their USA counterparts in Brussels on Saturday hoping to get "clarity" on President Donald Trump's controversial new steel and aluminium tariffs.

And that doesn't factor in the costs borne from retaliation taken by foreign partners against unrelated US industries.

On average, the EU applies a 3 percent tariff on US products, while the average tariff applied by the 2.4 percent, the European Commission says, adding that isolating cars is "cherry-picking".

"That being said, any benefits attributable to tariffs are likely to be outweighed by costs".

Trump insisted there would be a fair process of negotiation, including talks of exemptions.

Union Pacific Railroad CEO Lance Fritz said he was talking with USA officials to "spread the gospel of what we all know here, which is closing our border won't create jobs".

Worldwide trade secretary Dr Liam Fox hit out at the Trump administration over steel tariffs in a statement to the House of Commons this evening.

Australia buys around 60 per cent of its military assets from the US, allows USA marines to rotate through Darwin every year, and swaps intelligence as part of the "Five Eyes" alliance also including Britain, New Zealand and Canada.

"As long-standing security partners of the USA, (the European Union and Japan) underlined to ambassador Lighthizer their expectation that European Union and Japanese exports to the U.S. would be exempted from the application of higher tariffs", an European Union statement said after the talks.

"We're doing tariffs on steel".

It also said Trump was "cherry-picking" particular tariffs to highlight differences, and maintained average tariffs were very similar on each side of the Atlantic - 3 percent for products into Europe and 2.4 percent into the United States.

Steel workers build a structure in Ottawa, Canada.

Despite speculation that this could refer to activities such as so-called freedom-of-navigation operations - or "FONOPs" - in the South China Sea, such operations would not require any kind of agreement with the US.

For the U.S., Trump has long touted and tweeted that economy will see big gains from the move, as he throws a lifeline to domestic manufacturers.

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