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Economy

Trump imposes tariffs on metals but open to relief for allies

US president calls move on steel and aluminum a 'matter of necessity'

U.S. President Donald Trump signs tariffs for steel and aluminum Thursday. The levies take effect in 15 days.   © AP

WASHINGTON -- U.S. President Donald Trump imposed tariffs on imported aluminum and steel, citing security concerns but leaving open the option of exceptions for American allies.

A 25% tariff on steel and a 10% levy on aluminum take effect in 15 days following the signing ceremony Thursday afternoon.

Speaking at a news conference Thursday, Trump called the actions "not a matter of choice, but a matter of necessity for our security."

The move follows a nine-month investigation by the U.S. into the country's trade relationships, according to the president. Trump said the American steel and aluminum industries had been "ravaged by aggressive foreign trade practices," describing the consequences as "factories left to rot" and "thriving communities turned into ghost towns."

Trump mentioned China several times in his remarks, saying it takes the country "one month to produce as much steel as the U.S. does in one year" following years of reductions in American steelmaking capacity. The tariffs follow from campaign pledges to fight for U.S. workers, he said.

Trump pointed to output of Chinese-made steel in his remarks on the decline of America's steel industry.   © AP

The White House has carved out temporary exceptions for Canada and Mexico amid ongoing talks to rework the North American Free Trade Agreement. Trump said that permanent exceptions to these levies could be written into NAFTA, depending on what America's negotiating partners are willing to compromise.

Separately, U.S. allies will be able to negotiate relief from the tariffs with Washington, a senior administration official said.

Mexican Economy Minister Ildefonso Guajardo at a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City on March 5.   © AP

Trump told reporters that his administration is "open to modifying or removing the tariffs" for allies. The president wrote on Twitter earlier that the U.S. would show "great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military."

But retaliation by U.S. trading partners threatens to ignite a full-scale trade war. China has suggested countermeasures are in store. The European Union is prepared to contest the tariffs at the World Trade Organization and impose retaliatory duties on American goods.

Opposition to the plan was fierce when it was announced March 1, as the Trump administration said the tariffs would apply uniformly to all trading partners. American business leaders and politicians, including those from Trump's own Republican Party, urged the president to abandon or soften the plan. Gary Cohn, Trump's top economic adviser, announced his resignation Tuesday in protest.

Among U.S. trading partners, Japan voiced concern over the move, while China called for talks to ease trade frictions.

Mexican Economy Minister Ildefonso Guajardo said that overproduction of steel is the real issue that should be dealt with, suggesting that the U.S. narrow the scope of its tariffs to target China. He spoke on Thursday local time in Santiago, Chile, where he attended the signing of the revised Trans-Pacific Partnership.

The Department of Commerce recommended tariffs and other actions in a January report to the president, saying weak domestic steel and aluminum industries pose a national security threat because they could disrupt military procurement.

The tariffs are authorized under Section 232 of the Trade Expansion Act, which allows the president to restrict imports for national security reasons. This provision was last used in 1982 against Libyan oil.

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