Canada Prepares Reprisals over U.S. Metals Tariffs, EU Reports Progress in Talks

SEATTLE (Scrap Monster): Canada prepared possible reprisals while the European Union reported progress in trade talks on Wednesday as new U.S. metals tariffs triggered more disruption in the global economy and added urgency to negotiations with Washington.

President Donald Trump's doubling of tariffs on steel and aluminum imports kicked in on Wednesday, the same day his administration sought "best offers" from trading partners to avoid other punishing import levies from taking effect in July.

The move will hit the closest U.S. trading partners - Canada and Mexico - especially hard. Canada is the top exporter of both steel and aluminum to the United States.

Prime Minister Mark Carney said Canada is prepared to strike back against the United States if talks with Washington to remove Trump's tariffs did not succeed.

"We are in intensive negotiations with the Americans, and, in parallel, preparing reprisals if those negotiations do not succeed," Carney told the House of Commons.

Canada's labour union Unifor called for retaliatory tariffs, while Ontario Premier Doug Ford urged Carney not to "sit back and let President Trump steamroll us."

Trump has made charging U.S. importers tariffs on goods from foreign countries the central policy of his trade wars, which have severely disrupted global trade flows and roiled financial markets.

The Republican president has long been angered by the massive federal trade deficit, saying it was emblematic of how trading partners "take advantage" of the U.S. He sees tariffs as a tool to bring more manufacturing - and the jobs that go with that - back to the United States.

However, the non-partisan Congressional Budget Office said on Wednesday that U.S. economic output will fall as a result of Trump's new tariffs on foreign goods that were in place as of May 13.

The U.S. tariff hike on the two metals to 50% from the 25% rate introduced in March took effect at 12:01 a.m. (0401 GMT) Wednesday. It applies to all trading partners except Britain, the only country so far to strike a preliminary trade agreement with the U.S. during a 90-day pause on a wider array of Trump tariffs that ends on July 8.

The 27-nation EU's trade negotiator, Maros Sefcovic, and U.S. Trade Representative Jamieson Greer said their meeting in Paris was constructive.

"We both concluded that we are advancing in the right direction, at pace," Sefcovic told reporters. Technical talks were ongoing in Washington, he said, and high-level contacts will follow.

"What makes me optimistic is I see the progress ... the discussions are now very concrete," Sefcovic said.

Greer said the talks were advancing quickly and demonstrated "a willingness by the EU to work with us to find a concrete way forward to achieve reciprocal trade."

Sefcovic said he deeply regretted the doubling of the steel tariffs, stressing that the EU has the same challenge - overcapacity - as the United States on steel, and that they should work together on that.

Courtesy: www.reuters.com