This morning in metals news, the U.S. finally slapped its Section 232 tariffs on the European Union, Canada and Mexico; China says it is ready to defend itself should a trade war transpire; and copper falls to a three-week low.
Tariffs Finally Hit E.U., Canada, Mexico
Last month, the U.S. granted a 30-day extension with respect to the temporary exemptions from the Section 232 tariffs for the E.U., Canada and Mexico.
With the new June 1 deadline approaching, many wondered what would happen, as NAFTA negotiations seem to have stalled and various European political and business leaders have declared they were preparing themselves for the tariffs.
The answer came this morning, when the U.S. announced it would apply the tariffs of 25% on steel and 10% for aluminum on the 28-member European bloc and its NAFTA peers Canada and Mexico.
Reactions came in quickly on the heels of the announcement.
“There is evidence the Section 232 strategy is working as the Trump administration moves ahead with its steel and aluminum trade actions. American smelters and steel mills are reopening, which means more jobs and added capacity. And more pressure is being applied by our allies to China on steel dumping and overcapacity,” said Scott Paul, president of the Alliance for American Manufacturing, in a release. “Looking ahead, the product exclusion process must be reasonable, and narrow enough so that it does not undermine the intent of the relief. The goals of restoring American industries to a sustainable operating domestic capacity and protecting national security must remain paramount.”
The Aluminum Association expressed disappointment in the scope of the announcement, as it has held the line that trade actions must be focused on Chinese overcapacity and not market-economy trading partners.
“Today’s action does little to address the China challenge while potentially alienating allies and disrupting supply chains that more than 97 percent of U.S. aluminum industry jobs rely upon,” said Heidi Brock, president and CEO of the Aluminum Association, in a release. “During a time of record demand for aluminum in the United States, it is critical that aluminum producers across the value chain have a steady and reliable source of supply. While this is an unfortunate outcome, the Aluminum Association will continue its dialogue with the administration on our shared goal of a healthy and sustainable U.S. aluminum industry.”
China Foreign Ministry Spokeswoman: China Will Never ‘Recoil From a Trade War’
Addressing the White House’s announcement Tuesday of intentions to impose investment restrictions and $50 billion in tariffs on Chinese goods, China Foreign Ministry Spokeswoman Hua Chunying said that although China does not want a trade war, it will defend itself if necessary.
“China always maintains that we should properly resolve and address relevant differences over economic and trade issues through equal-footed dialogue and consultations in a constructive manner,” she said during a press conference Wednesday. “This serves the fundamental and long-term interests of our two countries and peoples, and meets the shared aspirations of the international community. Once again, we don’t want a trade war, but will never quail or recoil from a trade war. One move can always be countered by another. If the US is bent on having its own way, we will surely take firm and forceful measures to safeguard our legitimate rights and interests.”
Copper Prices Fall
The copper price fell as U.S.-China trade tensions have rattled investors — according to Reuters, LME copper hit a three-week low on Wednesday.