US: Foreign trade again in focus - Rabobank

The EU, Canada, Mexico and other US trading partners may breathe a sigh of relief after the Trump administration delayed imposing steel and aluminium tariffs until June 1, points out the research team at Rabobank. 

Key Quotes

“That said, by warning that this will be the final temporary extension, it does little to lessen the unpredictability of the final outcome.  The EU has threatened both a WTO case and retaliatory tariffs, though this would raise the risk of further action from the US.  In turn, this could increase the risk that the US sharpens its focus on German exports. Germany is the only EU country on the US’s Treasury’s Monitoring List due to its large current account and trade surpluses.”

“The 30-day extension does provides the US with more time to build a coalition with its key trading partners against China. Later this week US and Chinese officials will hold trade talks in China. US Treasury Secretary Mnuchin said that he was “cautiously optimistic” about the meeting adding that “we’re looking to have a very frank discussion on trade, on the issues of the trade imbalance.” The markets will be looking for constructive comments from both sides to ease concerns that a full-scale trade war may erupt between the US and China.”