Oil industry fears toll of Trump steel, aluminum tariffs

Oil industry fears toll of Trump steel, aluminum tariffs

United States commerce secretary Wilbur Ross, who will speak to Dr Fox again on Monday, said there was still room for compromise with the EU.

China, he said, had continued to negotiate even after getting hit by tariffs. "I would like to absolutely assure Canadian participants, those who work in steel and aluminum industries, that the government is absolutely prepared to and will defend Canadian industries and Canadian jobs".

USA stocks shuddered at the news, however, with the The Dow Jones Industrial Average dipping over one percent, S&P 500 dropping 0.54 percent, and the Nasdaq going down 0.16 percent.

The tariffs - 25 per cent on steel and 10 per cent on aluminium - will take effect at midnight Thursday, marking a major escalation of the trade war between the USA and its top trading partners.

"When it comes to unfairly traded steel and aluminum, Mexico, Canada, and Europe are not the problem - China is", said Kevin Brady, chairman of the House Ways and Means Committee.

It could also place the United States in a trade dispute on more than one front.

U.S. Commerce Department data show Canada is the top source of U.S. imports of steel and aluminum, while Mexico is the U.S.'s fourth-largest provider of steel and 10th-largest of aluminum.

Soon after the announcement, Canadian Prime Minister Justin Trudeau took to Twitter to voice his reaction.

About half of Canada's steel and 80 per cent of aluminum is exported to the U.S.

Europe, along with Canada and Mexico, had been granted a temporary reprieve from the USA tariffs after they were unveiled in March by Trump, who said the levies were needed to stem the flood of cheap steel and aluminum into the US and that to impose them was a national security priority.

The Mexican peso dropped about 1 percent and the Canadian dollar shed about 0.6 percent.

The EU also vowed to retaliate against a list of us goods worth over $3 billion, including bourbon, orange juice, motorcycles and blue jeans. Shares of Harley-Davidson Inc fell 2.17 percent and Brown-Forman Corp, maker of Early Times and other bourbon brands, lost 2.1 percent.

China's Auto-Import Tariffs Cut; So Why Is Tesla Stock Falling?
The comments from China came after Trump said on Tuesday US time that the country has not reached a deal with China to save ZTE . Mr Trump's tweet on Wednesday (local time) suggested the President was now feeling more doubtful about the talks with China.

The Canadian dollar weakened against its US counterpart on Thursday, reversing much of its gains from the day before, after data showed weaker-than-expected growth in the domestic economy and USA tariffs dented prospects for NAFTA trade pact talks. "This month he called it a "horrible" disaster for the US economy".

"Without a strong economy you can't have strong national security", Ross said.

Last week, Trump said that Canada is "very spoiled" and "very hard to deal with" in North American Free Trade Agreement (NAFTA) negotiations.

Ben Digby, CBI's global director, said: "These tariffs could lead to a protectionist domino effect, damaging firms, employees and consumers in the US, UK and many other trading partners".

"That means those safeguard measures must be extended beyond the USA, on a global basis".

The Dow sank 200 points on Thursday when Trump confirmed that the steel and aluminum tariffs would hit Canada, Mexico and the EU.

US crude oil futures settled 1.7 per cent lower at $67.04 a barrel despite a larger-than-expected decline in inventories.

Canada, Mexico and the European Union were among the countries granted relief while the United States pursued negotiations to address the administration's concerns about the state of domestic steel and aluminum production.

White House officials addressed critics of the move during a call Thursday, saying the tariffs are necessary to protect the national security of the United States.

EU Commission spokesman Margaritis Schinas said Thursday the European side is "ready to deal with any kind of scenario, and to defend the EU interests and worldwide trade law".

As the announced tariffs prompted threats of retaliation, and an immediate riposte from Mexico, several lawmakers in Trump's Republican Party urged a continuation of the exemptions for such major partners, instead of taking actions that risk a trade war.