Trade War: US to impose import tariffs on Canada, Mexico & the EU; EU & Canada vow to retaliate

Washington/Paris/Ottawa: US President Donald Trump has decided to impose trade tariffs on its allies, Canada and Mexico as well, along with the European Union. On Thursday, the US Secretary of Commerce Wilbur Ross announced imposition of taxes on the imports of steel and aluminium from Canada and Mexico along with the European Union. There have been sharp retorts from Canada and the European Union on this decision by Trump. Canada has termed this announcement as an insult to the long-standing security partnership between the two countries whereas, the European Union has termed the announcement as ‘trade protectionism’.

US Secretary of Commerce Wilbur Ross informed the reporters about the impositions of tax on steel and aluminium imported from the European Union, Canada and Mexico. The tax on steel will be at 25% while that on aluminium will be at 10% and the implementation will start from the 1st of June. Ross explained that the decision to impose tax was due to the fact that the discussions about trade concessions with the European Union and about the NAFTA agreement with Canada and Mexico were not showing much progress. Ross said that the United States is keen to continue negotiations with these countries about trade even after the imposition of these taxes.

There were severe reactions on the announcement of impositions of tax. ‘The taxes imposed by the United States are totally unacceptable. These taxes are a blatant insult of the long-standing security partnership between the United States and Canada. The United States has delivered a blow to the pride of the Canadian citizens, who have been fighting shoulder to shoulder with their American brothers. We were hoping that there will be some discretion used in this matter. But the US administration has destroyed all hope,’ Canadian Prime Minister Justin Trudeau reprimanded the United States.

Canadian Foreign Minister Chrystia Freeland has followed up the Canadian Prime Minister’s warning with an announcement to impose tit-for-tat taxes on the United States. As per the announcement, imports from the United States to the tune of $ 12 billion will be taxed and the items covered include coffee, sugar, yogurt, mattresses, lawn mowers, sail boats and washing machines. Freeland said that the United States announcement challenges the provisions of the World Trade Organisation as well as the NAFTA agreement. Mexico has also criticised the United States action and has imposed taxes to the tune of $ 3 billion on US imports.

The European Union, which had issued a decisive warning of a trade war to the US only 24 hours ago, has also given a strong reply. ‘These unilaterally imposed taxes are unjust and against the rules of the World Trade Organisation. This is nothing but trade protectionism. From now on, the EU will also take the necessary steps to protect the interests of the European member countries as per the international law,’ was the salvo fired by the President of the EU, Jean Claude Juncker. Trade Commissioner of EU Cecilia Malmstrom said it was a bad day for international trade. The European officials have even declared the list of items coming from the US to be covered under the taxation list.

It is claimed that the imposition of taxes by the United States on the friendly countries on Thursday, and the subsequent reactions, indicate that a new phase of global trade war might soon begin.