Trump Delays Steel Tariff Decision Until June 1st, Exempts South Korea

[Swordsmyth]

The Wall Street Journal reports (https://www.wsj.com/articles/trump-postpones-steel-tariff-decision-for-eu-other-u-s-allies-1525130978) that President Trump has decided to postpone decisions about imposing steel and aluminum tariffs on the European Union and other U.S. allies until June 1. The temporary exemptions extended to the EU, Canada, Mexico, Australia, Brazil and Argentina, which, as we noted earlier, (https://www.zerohedge.com/news/2018-04-30/decision-time-will-us-impose-tariffs-or-not)if revoked would throw the global markets into turmoil and international supply chains into a deep well of uncertainty, as the exemptions add up to almost half of the U.S. steel imports.

The U.S. initially imposed world-wide tariffs of 25% on U.S. steel imports and 10% on aluminum in March, but it temporarily exempted several U.S. allies from the tariffs. Monday’s decisions extend that delay.
Extensions for Canada and Mexico were widely expected, but it was uncertain whether the U.S. would proceed with tariffs on Europe May 1 as scheduled.
The extension does not erase the uncertainty that will remain in the interim. It is still unknown if some countries can negotiate limited quotas, make deals on goodwill, or if all countries will be slapped with tariffs.
In addition, WSJ reports (https://www.wsj.com/articles/trump-postpones-steel-tariff-decision-for-eu-other-u-s-allies-1525130978)that the White House will announce Monday evening that it has finalized a deal to exempt South Korea from the tariffs, mirroring details that have been previously released by the U.S. Trade Representative’s office.

More at: https://www.zerohedge.com/news/2018-04-30/trump-delays-eu-steel-tariff-decision-until-june-1st-exempts-south-korea

[phill4paul]

Keep 'em guessing. Everything on the table.

[Swordsmyth]

The European Commission said the U.S. decision to extend the exemption period prolongs market uncertainty and impacts business decisions. The German government (https://worldview.stratfor.com/article/macron-merkel-trump-washington-visit-eu-us-trade-germany-france) said it expects a permanent exemption and seeks to hold trade negotiations with the United States.

More at: https://worldview.stratfor.com/situation-report/us-eu-reacts-extended-tariff-exemptions

[Swordsmyth]

The United States has halted negotiations with Brazil over protectionist trade measures on steel and aluminum and reinstated tariffs and quotas on the metals coming to the United States from Brazil, Reuters reported May 2. The United States reportedly ended negotiations April 26 by offering a choice between tariffs and quotas.

More at: https://worldview.stratfor.com/situation-report/brazil-negotiations-ended-us-steel-aluminum-trade-measures

[Swordsmyth]

While the US-China trade talks have dominated headlines in the financial press this week, the Wall Street Journal (https://www.wsj.com/articles/trump-is-targeting-10-cut-in-eu-steel-aluminum-exports-to-u-s-1527020276) on Tuesday published details from the Trump administration's ongoing trade negotiations with the European Union, which increasingly look like they, too, have arrived at an impasse.
According to WSJ (https://www.wsj.com/articles/trump-is-targeting-10-cut-in-eu-steel-aluminum-exports-to-u-s-1527020276), Trump is pushing the EU to reduce steel and aluminum exports to the US by about 10%, according to several high-ranking EU officials who have apparently chafed at the administration's demands. Officials have gone so far as to declare the measures illegal under World Trade Organization rules.
Negotiations are unfolding rapidly as the EU seeks to extend its temporary exemption from steel and aluminum tariffs that the Trump administration has said will expire June 1.
https://www.zerohedge.com/sites/default/files/inline-images/2018.05.22eusteel.JPG
The Trump proposal has offered two avenues for arriving at the US's desired result. One is a quota fixed at 90% of US imports from the EU in 2017. The other would impose tariffs on a certain quota of imports with the aim of achieving the same 10% reduction, according to Poland’s Entrepreneurship and Technology Minister Jadwiga Emilewicz, who added that EU governments discussed the matter on Tuesday. However, the exact scope and details of the quotas have not yet been made clear.

"We are under the impression that somehow they want to limit steel imports to the U.S.," European Trade Commissioner Cecilia Malmstrom said of continuing negotiations with Washington before briefing EU governments.
"Aluminum as well," she said, without providing details.
European Trade Commissioner Cecilia Malmstrom has reportedly been in regular contact with Commerce Secretary Wilbur Ross ever since the US surprised the world by announcing its steel and aluminum tariffs back in March. Still, despite their close cooperation, Malmstrom said that deciphering Trump's wants and needs has been by far the most frustrating aspect of the negotiations.
* * *

When it comes to setting a benchmark for their discussions with Trump, European countries have interpreted South Korea's trade concessions as a cautionary tale. Seoul agreed to cap its US steel exports at 70% of their average from the past three years - a decision that created daunting problems for Korean steelmakers.

Seoul agreed to cap its U.S. steel exports at 70% of the average export total over the past three years. That created a daunting task for South Korean steelmakers, the third-largest supplier to the U.S., which filled their annual quota in nine out of 54 categories in the first four months of 2018. Quarterly limits imposed by the Trump administration pose another challenge, with any steel exports exceeding the cap facing delays, redirection or destruction.
"The devil is in the details," an EU official said. "There is more to a quota than catches the eye, it’s about how you manage it."
European officials have asked Trump not to punish US allies for a global steel glut precipitated by Chinese overproduction. The EU has readied countermeasures, including €2.8 billion ($3.3 billion) in levies against US goods, should the US reject the trade bloc's offers to accept US import quotas and lower some EU trade barriers in exchange for receiving a permanent waiver on steel and aluminum tariffs.

More at: https://www.zerohedge.com/news/2018-05-22/trump-pushing-10-cut-aluminum-steel-imports-eu