U.S. unleashes new raft of tariffs on other countries
Updated 14:47, 03-Dec-2019

The U.S. is opening up new fronts in the trade war by announcing a series of tariffs – unrelated to China – on Monday.

The comeback of tariffs on steel and aluminum

U.S. President Donald Trump on Monday announced plans to reimpose tariffs on steel and aluminum from Brazil and Argentina, hitting back at what he called their "unfair" policies.

"Effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries."

"Brazil and Argentina have been presiding over a massive devaluation of their currencies," which is hurting American farmers, Trump wrote on Twitter.

Brazilian President Jair Bolsonaro stated the same day he will be directly contacting Trump on the issue.

VCG Photo

VCG Photo

According to Brazil's Steel Institute, "There is no initiative by the government to artificially devalue the Real, and the decision to tax Brazilian steel as a way to compensate American farmers is retaliation against Brazil, which is inconsistent with the partnership relationship between the two countries."

The decision "ends up hurting the American steelmaking industry itself, which needs semi-finished products exported by Brazil in order to operate its mills," the institute added.

Jose Urtubey, spokesman for Argentina's powerful UIA industrial lobby, stressed producers in the country will be harmed immediately by the tariffs.

Brazil is the second-largest supplier of steel to the U.S. market behind Canada. And the U.S. imported nearly 169,000 tons of steel from Argentina last year, representing more than 220 million U.S. dollars in trade.

Trump last year announced global tariffs of 25 percent on steel and 10 percent on aluminum but later approved exemptions for some countries, including Argentina and Brazil – after they agreed to quotas.

Endless disputes under the pretext of aircraft subsidies

The World Trade Organization on Monday rejected European Union claims that it no longer provides subsidies to plane maker Airbus, citing that the Airbus A380 and A350 jetliners continue to be subsidized as a result of past European government loans.

U.S. Trade Representative Robert Lighthizer said the decision affirmed that European subsidies to Airbus continued to harm the U.S. aerospace industry, and strong action was required to eliminate such market-distorting subsidies.

Since 2004, the U.S. and the EU have accused each other of distorting competition in the field of aircraft manufacturing, and have both brought their complaints to the WTO  for subsidizing Airbus and Boeing.

The United States Trade Representative (USTR) was in October awarded the right to impose tariffs of 10 percent on large civil EU aircraft and 25 percent on the selected farm and other products.

European executives warned against a "lose-lose" trade war.

Retaliation against digital services tax

The U.S. government on Monday said it may slap punitive duties of up to 100 percent on 2.4 billion U.S. dollars in French imports after concluding that France's new digital services tax would harm U.S. tech companies.

USTR said it would collect public comments on its proposed tariff list through January 14 and hold a public hearing on January 7, but did not specify an effective date for the tax.

The list targets some products that were spared from 25 percent tariffs imposed by the United States over disputed aircraft subsidies, including Champagne, handbags and make-up preparations.

The French Parliament passed a new law on July 11 to impose a tax on digital giants, including U.S. companies Google, Amazon, Facebook and Apple, and its Finance Minister cited that the tax is necessary to make internet giants pay their fair share of taxes.

While USTR said its "Section 301" investigation found that the French tax was "inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies."

Lighthizer said the U.S. government was also exploring whether to open similar investigations into the digital services taxes of Austria, Italy and Turkey.

(With input from Reuters, AFP)