Trump stalls auto tariff decision for six months

Washington. President Trump is delaying any decision to impose auto tariffs on car and auto part imports deciding aga

Washington. President Trump is delaying any decision to impose auto tariffs on car and auto part imports deciding aga

Bogged down in a sprawling trade dispute with US rival China, President Donald Trump took steps Friday to ease tensions with America's allies - lifting import taxes on Canadian and Mexican steel and aluminum and delaying auto tariffs that would have hurt Japan and Europe.

A U.S. Commerce Department review found that imports of automobiles and some parts could hurt U.S. national security, but Trump made a decision to wait 180 days before imposing tariffs and ordered new talks to deal with the issue.

As a tactic in trade talks, administration officials and supporters say the tariffs have worked, at least in bringing parties to the table and, in Canada and Mexico's case, in agreeing to revise the North American Free Trade Agreement, one of Trump's key campaign promises. Chuck Grassley (R-Iowa) warned Trump that he needed to lift the steel and aluminum tariffs if he wanted the new U.S. -Mexico-Canada Agreement trade deal to survive.

"The two leaders discussed the United States' Section 232 tariffs on steel and aluminum and Canada's retaliatory tariffs", the Prime Minister's Office said in a readout of the call. Critics said Canada and Mexico were willing to negotiate changes to the NAFTA agreement and that the tariffs were not needed.

The agreement says the USA and Canada will establish a process for monitoring steel and aluminum trade between them. "The president is also right to be deescalating tension with our North American allies". CNBC reported on Friday that the next round of US-China negotiations were "in flux", with both sides refusing to compromise.

Trump said in his proclamation that imports of steel products from Turkey declined 48% in 2018, "with the result that the domestic industry's capacity utilization has improved at this point to approximately the target level recommended" by Commerce Secretary Wilbur Ross. "Those issues still need to be remedied", said House Ways and Means Committee Chairman Richard Neal.

"The European Union treats us, I'd say, worse than China - they're just smaller", Trump said at an event.

Toyota Motor has said the tariffs "threaten U.S. manufacturing, jobs, exports, and economic prosperity".

"We stayed strong because that's what workers were asking ... that's what Canadians were saying", Trudeau said. Some U.S. lawmakers say passage would become more hard after the recess due to budget battles expected in the fall and increased 2020 presidential campaign activity.

Now, Trump will have up to six more months to make a choice about applying a 20 percent tariff on vehicles assembled in the European Union, under the guise of national security and protecting the U.S. auto industry. If there is a surge in an individual product, the importing country can re-impose tariffs on that product.

Toronto trade lawyer Lawrence Herman said it's too soon to predict whether Democrats in the U.S. House of Representatives will ratify the new North American trade pact.

The Alliance of Automobile Manufacturers, a trade group representing General Motors Co, VW, Ford Motor Co and others, said the companies remained "deeply concerned that the administration continues to consider imposing auto tariffs". But Trudeau objected, and the deal does not include quotas, two Canadian sources said.