Steel industry is braced for United States import tariffs

Former President George W. Bush at the Ronald Reagan Library.   Justin Sullivan  Getty Images

On Monday, Trump Tweeted - "Really great numbers on jobs & economy! Things are starting to kick in now, and we have just begun", he wrote. He added: "Don't like steel & aluminum dumping!"

So despite some compromises, the USA still has a mechanism to declare a trade war over steel at any time.

The host of the gathering, Chancellor Angela Merkel, has made clear that she intends to focus on issues on which Mr. Trump has sharply parted ways with much of the European Union, including trade, climate change and migration.

French President Emmanuel Macron challenged Trump's view that the U.S.is losing out on trade, the official said. Trump's Commerce Department launched its review in April, missed a self-imposed deadline for a decision last month and is expected to announce a verdict soon. A conclusion that steel imports do endanger national security would give Trump significant leeway in drafting tariffs and other measures to protect the domestic industry.

William Reinsch, a fellow at the Stimson Centre said if the threat of tariffs are used to pressure members of the G20's forum on steel overcapacity - set up previous year - to tackle the problem, a good outcome could yet prevail.

The rarely used provision of the 1962 Trade Expansion Act is considered controversial because it exploits a national security exemption in worldwide trade rules that could encourage tit-for-tat trade retaliation with USA trade partners.

Deutsche Bank
Deutsche Bank

"A number of EU countries may be affected by a US measure, certainly more than countries such as China for which steel exports to the USA have mostly been blocked by massive anti-dumping actions", the European Steel Association, known as Eurofer, said.

While tariffs on both products would be aimed primarily at China, U.S. allies fear they will bear the brunt of the measures because Chinese steel exports are already largely subject to U.S. restrictions and Canada and Mexico are likely to be exempt.

The European Union has already promised to retaliate if it is hit by US steel tariffs.

"We start with the proposition that we have a global, extraordinary, excess amount of capacity that is basically created by China", U.S. Trade Representative Robert Lighthizer told members of the House Ways and Means Committee during a June 22 hearing in Washington.

But Trump's move to protect the USA steel industry outside the WTO framework could nonetheless irritate other the world leaders gathered at the larger G20 meeting in Germany this week.

All eyes will be on Trump, who had vowed North Korea's goal of possessing an ICBM "won't happen" and has repeatedly pressed China to rein in its truculent neighbour.

Trump, Merkel to meet ahead of G20 talks
About 20,000 police will be deployed to ensure the security of the summit. Copyright 2016 United Press International, Inc.

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