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Trump keeps his US allies on their toes before the deadline for steel tariffs



President Donald Trump speaks at a press conference with German Chancellor Angela Merkel in the East Room of the White House in Washington. (1

9659003) Steven Mufson and Damian Paletta

President Trump on Monday approached a midnight appointment for one of the most momentous economic decisions of his presidency on excluding important allies from steel and aluminum tariffs, but both Cabinet members and foreign leaders remained uncertain as the Commander-in-Chief continued becomes.

"The president has not made a decision yet," said Treasury Secretary Steven Mnuchin in an interview aired Monday on the Fox Business Network. At the weekend, Secretary of Commerce Wilbur Ross said the White House would provide relief to some countries, but he would not say which one.

The deadline is a key test of Trump's trade strategy and diplomacy, which uses his very personal style of negotiation against the determination of the major US trade partners and allies to arrest and avenge, if necessary, the rules of the World Trade Organization.

Trump has shown his willingness to befriend and abuse almost every ally and opponent, a dynamic that has emerged in the last two months when he tried to get many of them to make concessions.

"We are new territory in trade policy," said Chad Bown, senior fellow at the Peterson Institute of International Economics. "What President Trump has done is to make everything in trade policy uncertain: you do not know almost every day what trade policy will be and companies find it very difficult to operate in such an environment."

Published earlier this year The Ministry of Commerce issued a report stating that US dependence on imported steel and aluminum posed a threat to national security. In March, Trump used this finding to announce hefty tariffs against China and Japan, and provided temporary exemptions for many other countries.

Ross said in an interview with The Post that Trump had acted within his authority. He said that Trump has "very far-reaching powers under Article 232 of the WTO treaty, he can raise tariffs, he can lower them, he can let countries in and let them out."

In recent weeks Trump has met with leaders of three US allies caught in the midst of the tariff debate. French President Emmanuel Macron and German Chancellor Angela Merkel appealed to Trump last week In order to change its stance, the government has continued to press for concessions and there is no guarantee that they will be spared.

European leaders have threatened a series of countermeasures if Trump continues its proposed tariffs. European actions target goods such as motorcycles and bourbons, which are produced in Republican castles.

In March, the government lifted the tariffs that it had proposed to the South Korean steel and aluminum producers. In return, South Korea changed its US-Korea free trade agreement and adopted quotas that would cut its steel exports to the United States by 30 percent below the average of the last three years.

The Trump government has urged European nations to adopt the same approach, but European leaders do not want to do that. "We demand that they either be in tariff mode or accept a quota," said Ross.

However, quotas are in some ways more attractive than tariffs, Bown said, because the governments of exporting countries generate revenues by selling export permits to their own companies without paying anything to the US government. The US government would generate revenue from taxes on higher-priced steel and aluminum. Consumers would pay higher prices.

China's role plays a major role in all these discussions. South Korea is the third largest steel exporter to the United States and the main importer of Chinese steel, which, according to some trade experts, is a channel for Chinese exports to the United States.

In recent decades, the Chinese government has been fueling massive domestic steel and aluminum industries that have delivered their goods in a way that has pushed down prices. China accounts for almost 6 percent of US steel imports, but according to Trump, the global flood of cheap steel is a factor that has led to the closure of numerous US smelters and the loss of American jobs.

For decades, a number of other countries have agreed with US officials that China must do more to address a global oversupply of steel and aluminum. So far, however, they have taken measurable steps at international meetings to persuade China to make changes. Trump took this approach by stating that he was acting unilaterally and threatening to lower tariffs on numerous United States allies, not just China.

"The Chinese have created the overcapacity problem," said William Reinsch, Senior Advisor at the Center for Strategic and International Studies. "It's one of the few cases in the trading industry where you can blame and be precise, and it's not a big step to say that if it's your fault, it's not unreasonable to draft a policy that addresses the problem pushing them back. "

Canada and Mexico would be hit by Trump's original proposal for broad tariffs on steel and aluminum, extensions will be received, Ross Bloomberg News said over the weekend. Canada is the largest source of US steel imports.

Associate Heather Long has contributed to this article.


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