Jun 01, 2018
WASHINGTON, DC – At midnight last night, the temporary exemptions on steel and aluminum tariffs granted to Canada, Mexico, and the European Union expired, leveling tariffs of 25 percent on steel and 10 percent on aluminum imported from these trading partners.
In a unified response, Canada, Mexico, and the European Union announced they would impose billions of dollars’ worth of retaliatory tariffs against a wide range of U.S. exports from apples to whiskey. Earlier this month, the EU had notified the World Trade Organization (WTO) that it intended to enact tariffs on more than $3 billion of U.S. commodities and goods, including rice. The EU also announced that it intends to file a dispute settlement case in the WTO against the U.S. action.
President Trump originally announced the tariffs in March, claiming the trade deficit in steel and aluminum imports to the U.S. was an issue of national security. Canada, Mexico, and the European Union were temporarily exempted from the tariffs at the time in order for negotiations to occur with each country. Yesterday, the administration asserted that there had not been enough progress in trade relations with these countries to justify any further exemptions, temporary or permanent, but that the situation could change.
“In response to the exemption expiring, the EU announced that it would proceed with imposing an additional 25 percent import duty on certain imports beginning as soon as June 20,” said USA Rice COO Bob Cummings. “Such retaliation will remain in place, according to the EU, until the United States removes its additional import duties on steel and aluminum.”
Rice - namely semi-milled, wholly milled, and broken - is but one commodity in a long list of U.S. exports that the EU will target. Other targeted goods include corn, peanut butter, cranberries, and orange juice.
The U.S. rice industry and other export commodities and products will be negatively impacted by the actions. The targeted commodities constitute 2.4 percent of U.S. exports to the EU, and the looming trade war could mean higher prices overall for U.S. consumers. The Dow Jones Industrial Average fell 250 points in the wake of the tariff announcements, (but today did gain much of that back on a strong jobs report released this morning).
“Of course we’re disappointed that rice is on the retaliation list,” said Carl Brothers, of Riceland Foods and member of the board of AARQ, the body that manages access to the EU’s Tariff Rate Quota (TRQ) for U.S. milled rice. “There’s a lot of uncertainty regarding the TRQ certificates purchased at auction just last week, and whether the EU’s tariffs are going to override them. Right now, I have concern for those who paid for certificates, since it is unclear as to whether certificates will be honored.”