US President Donald Trump on Friday 9 March
’18 signed two proclamations that impose 25 per cent tariff on imported steel
and 10 per cent on aluminium.
The contentious tariffs come into effect in 15 days.
Though primarily targeted at the massive steel and aluminium dumping by
China, only two countries - Canada and Mexico - have been exempted from the new
import tariff, that too till the time the North America Free Trade Agreement
(NAFTA) negotiations are complete.
Other countries would have to negotiate with US Trade Representatives
(USTR) if they want exemptions from the steel and aluminium import tariff,
Trump said as he vowed to slap "reciprocal tariffs" on countries like
China and India if they do not match America's tariff.
The import tariffs are likely to face retaliation from America's top
trading partners, the European Union and China.
Trump signed the proclamations in presence of steel workers from
Pennsylvania, Vice President Mike Pence, Treasury Secretary Steven Mnuchin,
Commerce Secretary Wilbur Ross, United States Trade Representative Robert E
Lighthizer and economist Peter Navarro, architect of his steel and aluminium
"We're going to be doing a reciprocal tax program at some point so
that if China is going to charge us 25 per cent or if India is going to charge
us 75 per cent and we charge them nothing. They are 50, they are 75 or they are
25, we are going to be doing the same numbers. It's called reciprocal. It's a
mirror of tags. So they charge us 50, we would charge them 50," Trump said
in his remarks before signing the two proclamations.
The US President said the stage for the imposition of reciprocal tax has
been set in the first year of his administration. "They will charge us 50,
we charge them nothing. Doesn't work. So that's called a reciprocal tax ...
mirror attacks. We will be going to be doing a lot of them," Trump said.
"American companies have not been treated fairly and some American
companies frankly have taken advantage of it and gone to other countries and
developed in Mexico, massive automobile plants, taking our jobs away and taking
our companies down to Mexico to make the cars and then they send them right
across the border without tax, without anything," he said.
Trump said a strong steel and aluminium industry are vital to US
national security. "Absolutely vital. Steel is steel. You don't have
steel. You don't have a country.
Trump said the "unfair" foreign trade practices were not
merely an "economic disaster" but a "security disaster" and
by signing the two proclamations he was defending America's national security.
"We want to build our ships, we want to build our planes, we want to build
our military equipment with steel, with aluminium from our country. And now
we're finally taking action to correct this long-overdue problem. It's a
travesty," he said.
Stating that he wants a lot of steel coming to the US, Trump asserted
that he wants it to be "fair". "We want our workers to be
protected and we want, frankly, our companies to be protected. By contrast, we
will not place any new tax on product made in the USA. So there's no tax if a
product is made in the USA. You don't want to pay tax? Bring your plant to the
USA. There's no tax," he said.
The action being taken, the president said, follows a nine-month
investigation by the Department of Commerce, documenting a growing crisis in US
steel and aluminium production that threatens the security of the country. It
is also bad for US economically and with jobs, he rued.
"The American steel and aluminium industry has been ravaged by
aggressive foreign trade practices. It's really an assault on our country. It's
been an assault. They know better than anybody. Other countries have added
production capacity that far exceeds demand. And flooded the world market with
cheap metal that is subsidised by foreign governments, creating jobs for their
country and taking away jobs from our country," he said.
Referring to a tweet by Tesla head Elon Musk, Trump said China charges
25 per cent duty on American cars whereas it is just 2.5 per cent on import of
Chinese cars into the United States.