Disregarding warnings, President Donald Trump has signed two proclamations, slapping import duties on steel and aluminium, and held out the possibility of imposing a “reciprocal tax” on countries such as India and China “at some point”.

Trump exempted US neighbours Canada and Mexico from his controversial tariffs order in the light of talks to renegotiate the North American Free Trade Agreement (NAFTA). He left open the possibility of exempting some other countries that he did not immediately identify except for Australia. The tariffs, signed on Thursday, will come into force in 15 days.

Trump, who has been irked by India’s 50 per cent duty on America’s Harley-Davidson motorcycles, brought up the “reciprocal tax” issue after reading out a tweet from Tesla founder Elon Musk, who pointed to China charging 25 per cent import duty on an American car as against the US charging just 2.5 per cent on a Chinese car.

“So we send our car over there, pay 25 per cent. They send their car over here, 2.5 per cent ...It has to change,” Trump said, adding: “We’re going to be doing a reciprocal tax programme at some point. If China is going to charge us 25 per cent or if India is going to charge us 75 per cent and we charge them nothing, if they’re at 50 or they’re at 75 or they’re at 25, we’re going to be at those same numbers.”

“It’s called reciprocal, it’s a mirror tax. So they charge us 50, we charge them 50. Right now they’ll charge us 50, we charge them nothing,” he said with reference to Harleys sold in India and Indian motorcycles sold in US, adding: “Doesn’t work. So that’s called a reciprocal tax or mirror tax. We’re going to be doing a lot of that.”

Trump sought to defend his tariffs push not only in terms of protecting American workers and industry, but also from the standpoint of national security. “A strong steel and aluminum industry are vital to our national security. You don’t have steel, you don’t have a country,” he said.

As for other countries looking for exemptions like Canada and Mexico, indications are that the White House will give other nations an opportunity to justify why they should be spared.

“If the same goals can be accomplished by other means, America will remain open to modifying or removing the tariffs for individual nations, as long as we can agree on a way to ensure that their products no longer threaten our security,” Trump said.

In respect of Canada and Mexico, it has been pointed out that the exemptions are linked to ongoing negotiations to revamp NAFTA to make it “fair” to all three partners, the third being the US. “I have a feeling we’re going to make a deal on NAFTA,” Trump said.

Trump issued the two proclamations, exercising his authority under Section 232 of US law that gives the President “the ability to address any threats to national security by restricting imports through tariffs”, the White House said.

“President Trump is taking action to protect America’s critical steel and aluminum industries, which have been harmed by unfair trade practices and global excess capacity,” a White House release said, noting that the tariffs on steel and aluminum are anticipated to reduce imports to levels needed for the domestic industries to achieve long-term viability.

“As a result, these industries will be able to re-open closed mills, sustain a skilled workforce, and maintain or increase production. The strengthening of our domestic steel and aluminum industries will reduce our reliance on foreign producers,” it said.

Courtesy: The Pioneer, Saturday, 10 March 2018 | S Rajagopalan | Washington