Subscibe to DEAL OF THE DAY

March 06, 2018

*-- Trump says new NAFTA deal for U.S. could avert tariffs --*

President Donald Trump said Monday new proposed tariffs on foreign steel and aluminum will be removed only if the United States gets a better deal with the North American Free Trade Agreement.

Trump's remarks followed his announcement last week of the new taxes, and threats by the European Union to retaliate by taxing U.S. goods.

"We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed," Trump wrote.

"Also, Canada must treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying."

A trade deal struck by former President Bill Clinton, NAFTA has been the target of renegotiation since Trump took office a year ago.

Comments about Trump's plans were met negatively by some world leaders. China said it would "protect its interests," and Canadian Prime Minister Justin Trudeau said he was "confident we're going to continue to be able to defend Canadian industry."

British Prime Minister Theresa May said she spoke with Trump by phone Sunday and raised a "deep concern."
Learn more about RevenueStripe...

Only the EU, though, has announced potential retaliation so far.

EU Commissioner for Trade Cecelia Malmstrom said earlier that U.S. exports to Europe -- like bourbon and jeans -- could face the 25 percent tax in response to the steel and aluminum taxes.

"We are looking at possibilities to retaliate, meaning we will also put taxes or tariffs on U.S. imports to the European Union," she said.

In a video statement, Malmstrom said the new U.S. tariffs are "motivated by internal security."

"We can't see how the EU can be a threat to internal security in the U.S," she said, adding that the EU could take the issue to the World Trade Organization.

Trump said a week ago the steel and aluminum tariffs are for the protection of U.S. workers -- and suggested he welcomes a trade war.
Learn more about RevenueStripe...

The EU prepared a $3.45 billion list of U.S. goods to be targeted in retaliation -- including U.S. steel and agricultural products like rice, orange juice and cranberries.

WTO Director-General Roberto Azavedo said "the potential for escalation is real. A trade war is in no one's interest."

The threat of a trade war prompted Swedish appliance maker Electrolux to postpone plans to build a $250 million investment in Tennessee.

"We're concerned about the impact that the tariffs could have on the competitiveness of our U.S. operations," Electrolux said.

Shares in European car makers traded lower on Monday after Trump suggested a tax on automobiles imported from Europe.