US President Donald Trump has suspended steel and aluminium tariffs against Argentina until May 1, citing its “important security relationship” with Argentina as the basis for the decision.
In a proclamation released Thursday evening, the administration based Argentina’s exemption on a “shared commitment to face the global excess of steel production capacity; reciprocal investment in our respective industrial bases and the strong economic integration between our countries.”
The statement also cited Venezuela’s unstable political situation as a key national security concern for both countries.
Washington already had announced that major metals exporters Canada and Mexico would be exempt as talks continue to revamp the North American Free Trade Agreement. Aside from Argentina, the European Union, Australia, Brazil, Canada, Mexico and South Korea are also exempted.
In testimony before the Senate Finance Committee, US Trade Representative Ambassador Robert Lighthizer said this week “the idea that the president has is that, based on a certain set of criteria, that some countries should get out.”
This comes only a few weeks after the Argentine Foreign Ministry and Production Ministry appealed to the US Department of Commerce in a statement to review Argentina’s case.
“Among our arguments, we emphasise the small participation our sales have in the US market. In effect, Argentine exports represent just 0.6 percent of steel and 2.3 percent of aluminium imports into the United States in those respective areas,” a statement from government read.
Argentine firms, in particular, would have been hit hard by the tariff. Aluminum represented an estimated 7.2 percent of Argentine exports to the United States in 2015 at a value of US$320 million, according to the MIT Observatory of Economic Complexity.
According to the Abeceb consultancy firm’s recent figures, Argentina exported US$493 million in aluminum to the US last year.
The tariffs would hit two Argentine companies especially hard: Techint (steel) and Aluar (aluminum).
In an interview yesterday, Argentine Commerce Secretary Miguel Braun – who was sent by President Mauricio Macri to Washington in the immediate aftermath of news of tariffs being made public – said that the US government was leaning toward looking at the issue on a case-by-case basis, rather than by country.
The issue of steel and aluminium tariffs dominated this week’s G20 summit of central bank governors and finance ministers in Buenos Aires, with US Treasury Secretary Steven Mnuchin facing repeated questions from journalists over the likelihood of Argentina winning an exemption and the possibility of a pending “trade war.”
TARIFFS FOR CHINA
The Trump administration has stressed that the primary target of tariffs is China, which has long had massive overproduction that has impacted the global market for steel and aluminum.
World stock markets have tumbled in recent days, prompted by escalating trade war fears, after President Trump separately imposed huge duties on Chinese imports and Beijing unveiled its own measures against US goods. Trump has announced levies on up to US$60 billion on imports from China for what he describes as the “theft” of US intellectual property, fuelling speculation that the recovery in the world economy could be thrown off course.