Ross Says U.S. to Extend Duty Relief to Some Allies, Not All

(Bloomberg) -- The Trump administration plans to extend relief from steel and aluminum tariffs to some countries, but not all, when their temporary exemptions expire on Tuesday, said Commerce Secretary Wilbur Ross.

Ross, in an interview in Washington with Bloomberg late Saturday, declined to identify which nations would be spared from the tariffs. He said the announcement will be made right before the May 1 deadline for the duties to kick in. The secretary indicated on Friday that nations have been asked to accept import quotas in return for tariff-free access of the metals into the U.S.

The steel and aluminum tariffs are fueling tensions with some of America's strongest allies, just as Treasury Secretary Steven Mnuchin leads a delegation this week to China for talks on what the U.S. sees as Beijing's unfair trading practices. Trump has threatened to impose tariffs on as much as $150 billion of Chinese goods if negotiations fail to yield progress, a move China that has said would provoke retaliation against key American imports.

The European Union last week asked to join a case, starting with consultations, that was initiated by China at the World Trade Organization over the U.S. steel and aluminum tariffs.

Little-Used Law

President Donald Trump used his broad powers under a little-used trade law to impose the 25 percent tariffs on steel and 10 percent on aluminum after a study by his administration found the imports threaten national security.

But Trump walked back from an earlier no-exemptions stance to give Australia, Argentina, Brazil, Canada, the European Union, Mexico and South Korea a temporary reprieve when the tariffs took effect in March, and directed U.S. Trade Representative Robert Lighthizer to handle negotiations with countries seeking exemptions.

So far, South Korea is the only nation to be spared from the duties after reaching a deal to revise its bilateral free trade agreement with the U.S., which was already under way.

To avoid the steel tariff, South Korea agreed to limit U.S. shipments of the metal to about 2.7 million tons a year, the ministry said. The country also agreed to double to 50,000 the number of U.S. cars that could be imported without meeting local safety standards.

Read More: European Leaders Reaffirm Commitment to Retaliate on Tariffs

The European Union has been among the most vocal critics of the tariffs, saying that it doesn't make sense for the U.S. to target steel and aluminum shipments of its defense partners in the name of national security risk. The EU has also said it's prepared to apply retaliatory tariffs on $3.5 billion of imports from the U.S., ranging from orange juice to blue jeans.

U.K. Prime Minister Theresa May discussed the “impact” of the U.S. tariffs and the “vital importance” of each country's steel and aluminum industries with French President Emmanuel Macron and German Chancellor Angela Merkel during separate phone calls this weekend

The leaders agreed to work with the rest of the European Union and the Trump administration to secure permanent exemptions, according to the a readout from May's office.

Macron and Merkel visited Washington separately last week, appealing directly to Trump for exemptions for the EU bloc, but failed to win any public guarantees.

Canada and Mexico, meanwhile, have rejected Trump's suggestion of linking the discussions over metals tariffs to securing the U.S. better terms in a renegotiated North American Free Trade Agreement. All three nations are expected to resume talks over updating Nafta on May 7, after Lighthizer returns from the trip to China with Mnuchin.

--With assistance from Bryce Baschuk Andrew Mayeda and Naomi Nix

To contact the reporter on this story: Jennifer Jacobs in Washington at jjacobs68@bloomberg.net.

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Alex Wayne at awayne3@bloomberg.net, Sarah McGregor, Ros Krasny

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