Europe, U.S. senator push back as Trump seeks lower EU tariffs

Date Mar 13 2018 15:58:21 Source:Reuters

BRUSSELS/WASHINGTON, March 12 (Reuters) - U.S. Commerce Secretary Wilbur Ross will urge the European Union to lower its trade barriers, U.S. President Donald Trump said on Monday, calling them unfair to U.S. farmers and industry, a view rejected by the EU and challenged by a Republican senator.

    The European Commission accused Trump of "cherry-picking" data to distort the debate in a transatlantic dispute over U.S. metals tariffs that threatens to become a trade war.

    The EU is seeking to be exempted from planned U.S. import duties of 25 percent on steel and 10 percent on aluminum, but says Washington has not made clear how the exemption process works.

    Trump said in a tweet on Saturday the United States was ready to drop its tariffs if the EU lowered its "horrific" rates on U.S. products. On Monday, he tweeted that Ross would be speaking with EU representatives about eliminating "large tariffs and barriers".

    "Not fair to our farmers and manufacturers," he wrote.

    White House Deputy Press Secretary Lindsay Walters said Ross will work closely with U.S. Trade Representative Robert Lighthizer on determining country exemptions from the steel tariffs, specifically "whether proposed measures between the United States and another country will address the national security threat posed by that country’s export to the United States of steel or aluminum products."

    Ross also has primary responsibility for overseeing a process under which companies can petition to exclude specific steel and aluminum products from the tariffs. A Trump administration official said these procedures are awaiting final clearance and are expected to be published within a week.



    Jeff Flake, a Republican senator from Arizona and vocal Trump critic, on Monday introduced a bill in Congress to nullify the tariffs, though it would be extremely difficult for the measure to achieve a two-thirds majority needed to override an expected Trump veto.

    Flake warned on the Senate floor that the tariffs risk a reversal of recent economic gains, adding: "We in Congress simply cannot be complicit as this administration courts economic disaster in this fashion."

    French Finance Minister Bruno Le Maire said he was worried about the possibility of a U.S.-EU trade war, but said Europe had to respond to new U.S. tariffs on Europe. Failure to do so "would give the impression to the European people that we are weak," Le Maire told reporters European metals industry conference.

    The Commission said it expected to be in contact with Washington over the metals tariffs this week, but that no formal talks had been scheduled.

    Meanwhile, Canadian Foreign Minister Chrystia Freeland is due to visit Washington this week from Tuesday to meet with Ross, Lighthizer and U.S. lawmakers to senators to "advance Canada’s efforts to keep trade open, fair and barrier-free, to benefit people on both sides of the border," the ministry said in a statement.

    Trump has granted Canada and Mexico a temporary reprieve from the steel and aluminum tariffs, but has linked permanent exemptions to progress in negotiations to update the North American Free Trade Agreement.

    Trump spoke to Canadian Prime Minister Justin Trudeau on Monday about the metals tariffs, the White House said in a statement.

    Trump also emphasized the importance of quickly concluding negotiations on the North American Free Trade Agreement (NAFTA) "to ensure the vitality of United States and North American manufacturing industries and to protect the economic and national security of the United States," the statement said.

    A European Commission spokesman said Trump was "cherry-picking" particular tariffs to highlight differences, and maintained that average tariffs were very similar on each side of the Atlantic at about 3.0 percent for products into Europe and 2.4 percent into the United States.

    The U.S. tariff for cars, at 2.5 percent, was lower than the EU rate of 10 percent, but its rate of up to 25 percent on trucks was higher. The Commission spokesman also pointed to U.S. import duties of up to 48 percent on shoes, 12 percent on textiles and 164 percent on peanuts.

    The EU has been talking with partners about a legal challenge at the World Trade Organization to Trump's plan and is considering safeguards to prevent steel and aluminium, diverted from the United States, flooding into Europe.

    It has also lined up 2.8 billion euros of U.S. products, from bourbon to motorcycles, on which to impose tariffs so as to "rebalance" trade flows.


Edited by SHMET

Chile files complaint to block sale of SQM shares to Chinese companies

Date Mar 12 2018 16:41:34 Source:Reuters

   SANTIAGO, March 9 (Reuters) - Chile's government has asked antitrust regulators to block the sale of a stake in lithium company SQM to a Chinese company on the grounds it would give China an unfair advantage in the global race to secure resources to develop electric vehicles, according to a document seen by Reuters.

    Chile development agency Corfo, which oversees SQM's lithium leases in the Salar de Atacama, claimed in a 45-page complaint filed on Friday that the purchase of a stake in SQM by "Tianqi Lithium, or any entity related to it directly or indirectly (including companies controlled by the government of China)" would "gravely distort market competition." 

    Eduardo Bitran, head of Corfo, said in an interview on Friday that Tianqi Lithium  002466.SZ  late in 2017 presented a "non-binding" offer for Nutrien Ltd's  NTR.TO  - formerly Potash Corp of Saskatchewan - 32 percent stake in SQM.

    SQM is one of the world's top producers of lithium.

    The offer was more than 20 percent over market value at the time it was presented, when SQM shares had reached all-time highs, Bitran said.

    "That would make the situation very difficult for those who wish to compete on the basis of economics," said Bitran, who is expected to leave his post on Sunday when Sebastian Pinera is sworn in as Chile's president, replacing Michelle Bachelet.

    A Tianqi spokeswoman declined to comment.

    Chilean antitrust regulator FNE will need to review the complaint.

    SQM and Tianqi, one of China's top lithium producers, are "extremely close competitors ... and were one to acquire an interest in the other - even minority - it would have serious anti-competitive impacts on the market," Bitran wrote in the complaint.

    Together, Tianqi and SQM control 70 percent of the global lithium market, the document said.

    Four other companies, all Chinese except for global miner Rio Tinto , were also vying for the Nutrien stake, Bitran said.

    Canadian fertilizer company Nutrien is selling its stake in SQM as part of pledges to regulators who approved this year the merger of Agrium and Potash Corp of Saskatchewan, which created Nutrien. SQM also has significant fertilizer production.

    Bitran said that then-Potash CEO Jochen Tilk, who visited Chile in December, had "threatened" to take the case to international arbitration court should Chile attempt to block the sale of its stake in SQM.

    Nutrien did not immediately reply to requests for comment.

    SQM operates primarily in Chile's Salar de Atacama, a lithium-rich resource that has the globe's lowest costs of production. Lithium is a key ingredient in rechargeable batteries.

    "If this company is controlled by the development interests of the Chinese automobile industry then the electric vehicle and (anti)-climate change movements at the global level will have a problem," said Bitran.

    "This is why I'm asking prosecutors to investigate, and that they join with anti-trust regulators of the OECD countries," Bitran said.


Edited by SHMET

S.Korea's POSCO, Samsung SDI agree to build cathode plant in Chile by 2021

Date Mar 12 2018 16:37:59 Source:Reuters

   SEOUL, March 11 (Reuters) - A consortium led by South Korea's POSCO  005490.KS  and Samsung SDI  006400.KS  will build a cathode plant in Chile by 2021 for the country's lithium batteries project, POSCO said in a statement on Sunday.

    POSCO said the steel maker and battery maker Samsung SDI will jointly invest 57.5 billion won ($54.02 million) for the plant to be constructed in Mejillones, a Chilean port city.

    The plant will produce 3,200 tonnes of cathode a year starting the second half of 2021, which will be used to make lithium batteries for electric vehicles.

    Beating 12 other companies, the joint consortium also includes China's Sichuan Fulin Industrial Group and Chile’s Molyment.

    The cathode market is growing fast due to increasing global demand for lithium ion batteries that are used for electric vehicles. By 2021, the cathode market is expected to expand four times to 860,000 tonnes by 2020 from 210,000 tonnes in 2016.

    POSCO said on Feb. 27 that it had agreed to buy up to 240,000 tonnes of lithium concentrate per year from Australian miner Pilbara Minerals to secure a stable source of raw materials to manufacture electric vehicle batteries.


($1 = 1,064.3800 won)


Edited by SHMET

Canada's steel town still nervous despite tariff reprieve

Date Mar 12 2018 16:35:20 Source:Reuters

   HAMILTON, Ontario, March 11 (Reuters) - A temporary exemption from U.S. tariffs is little comfort to the Canadian steel city of Hamilton, coping with months of uncertainty as U.S. President Donald Trump has threatened a potentially devastating 25 percent duty unless the North American Free Trade Agreement is renegotiated.

    Canadian negotiators are weighing the interests of the relatively small sector, responsible for about 22,000 direct Canadian jobs and C$9.0 billion ($7.0 billion) in U.S. exports, against those of bigger industries like auto manufacturing and politically influential groups like dairy farmers.

    "I don't think we're at the end of it. Now it's being used as leverage," said Hamilton Port Authority Chief Executive Officer Ian Hamilton. "President Trump is putting a lot of pressure on everybody."

    Hamilton, population 700,000, has pushed to diversify its economy, with better transit links to Toronto and affordable homes that are attracting families priced out of Canada's biggest city. A C$139-million project is underway to clean up coal tar that contaminates the harbor and condos are replacing once empty downtown storefronts.

    When Canadian steel escaped U.S. steel tariffs in 2002, the duties had diverted some cheap steel into Canada. In recent years, a global steel glut has made it difficult for Canadian mills to compete.

    But ArcelorMittal's  MT.AS  Dofasco mill, coking and finishing operations at Stelco  STLC.TO , and a collection of smaller operations still directly employ 10,000 people in Hamilton.

    The North American steel industry is heavily integrated, with raw materials, steel and parts crossing the U.S.-Canadian border several times before a finished product such as a vehicle or refrigerator is sold to consumers. About 65 percent of the Hamilton port's tonnage is iron ore and coal used to make steel.

    Hamilton, the port president, said one steel company called after Trump first signaled the tariffs on March 1, when it was unclear whether Canada would be exempt at all. The firm wanted to know if the agency might be willing to take over management of its warehouse and find different cargo to fill it.

    Hamilton Chamber of Commerce President Keanin Loomis, a former Washington lawyer, is part of a new generation in the city who have never worked in a steel mill. But like much of the city, he has a personal connection to steel, a father-in-law retired from the Dofasco mill.

    If a tariff is imposed, Loomis expects imports to lower domestic steel prices, potentially driving some employers south of the border, where tariffs are expected to boost prices.

    Loomis said high labor costs, environmental regulations and a looming carbon tax already make it difficult for the steel industry to compete.

    "This could be the thing that puts it over the edge,” he said.

    The city's United Steelworkers Local 1005 has only about 550 active members, down from more than 13,000 in its heyday in the 1970s.

    The local union represents workers at Stelco, but not Dofasco, which never organized. Since 2004 it has weathered the closure of Stelco's Hamilton mill, Stelco's two trips through bankruptcy protection, and two new owners.

    Members at another plant, Max Aicher North America, have been locked out for almost five years over proposed wage and benefit cuts. And union president Gary Howe sees choppy waters ahead.

    "With Trump being in there, it's probably never going to be over," he said.

    The Canadian government has vowed to continue lobbying Washington until the threat of duties disappears. Pressed on Trump's decision to link the exemption to NAFTA, Canadian Foreign Minister Chrystia Freeland said on Thursday that Canada considers the two issues to be totally separate. 

    "I think they should get some more backbone," Steve Kajganic, a retired veteran of the Stelco mill and a second-generation steelworker, said of the Canadian government.

"Stand up for our country, instead of selling it out."

Edited by SHMET

Toolbox trade wars: How a sure winner in U.S. dispute has yet to reap benefits

Date Mar 12 2018 16:31:05 Source:Reuters

  FRANKLIN PARK, Ill., March 12 (Reuters) - Nestled in an industrial park near the end of the runway of O’Hare International Airport, Metal Box International Inc. should be one of the winners of a little-known trade war over toolboxes.

    In January, the U.S. International Trade Commission ruled Chinese imports had harmed domestic producers of big tool chests sold in retail stores, prompting the Trump administration to slap anti-subsidy duties of up to 95 percent on Chinese boxes.

That could jump far higher later this year, after the administration decides whether to add anti-dumping duties on top

of the anti-subsidy charges.

    "This is a game changer for us," said Mitch Liss, one of the owners of the privately held company, who said regaining just a small slice of the Chinese business would make the factory boom.

    Metal Box International is one of only two remaining U.S. producers of such boxes. The other is Waterloo Industries, a far larger company recently acquired by Stanley Black & Decker Inc, the global tool producer.

    So if retailers were going to start buying American again to avoid the mounting duties, it would almost certainly be visible at this factory.

    It hasn't worked out that way. There was a small uptick after the January ruling, Liss said, but so far no boom in orders. After spending $300,000 on new equipment in a surge of optimism, he put plans to buy additional machines on hold and has not added any new workers.    

    Meanwhile, the Trump administration's move last week to crack down on steel and aluminum imports is threatening to boost costs for Metal Box International as well as Stanley Black & Decker, which uses those metals to fashion similar tool chests.

    Stanley Black & Decker declined to talk about whether it was seeing any impact on its business from the new toolbox duties, though a spokesman told Reuters the International Trade Commission’s decision could mean “increased volume in the plant, which can translate into growth in U.S. manufacturing jobs.”

    A spokesman for Home Depot said he would not discuss the company's tool chest sourcing "for competitive reasons."

    The current battle over steel and aluminum tariffs underscores the risks and complexity in trade disputes, which often pit America’s love of cheap imports against its desire to protect blue-collar jobs. Winners and losers aren’t always initially clear.

Tariffs on steel and aluminum could help some U.S. workers - United States Steel Corp cited the prospect of tariffs this week as its reason to restart a mill in Illinois, for instance.

    But as a consumer of steel, Liss said the metal tariffs will hurt him but quickly adds that he understands why industries are looking for protection from cheaper imports.


    Metal Box International had a strong business in tool chests as recently as 2014, when among other models it sold a design to Home Depot with glass on the fronts of the drawers - which made it easier to see which tools were in each compartment. Those were a big seller.

    But the business quickly faded, he said, as they were displaced by imports that sold to retailers at lower prices than Metal Box International could match. Shipments of boxes fell by half in 2015 and fell again by half in 2016, said Liss.

    The company was planning to shut down when Liss heard that his last U.S. competitor, then called Waterloo Industries, was planning to file a trade case. Waterloo coordinated its efforts with Liss, who traveled to Washington to testify against the importers.

    The trade case targeted only a slice of the toolbox industry. Small, portable toolboxes were excluded, as were professional-type toolboxes sold by companies such as Snap-On, which market directly to buyers.

    Companies have long sought trade protection in Washington, often finding as much success under Republicans as Democrats. The trade dispute process is meant to be bi-partisan, with an equal number of Democrats and Republicans sitting on the International Trade Commission.

    But the climate now has shifted decisively in the favor of protection under Trump, especially for old-line industries like steel. The Commerce Department said it launched 82 new investigations into trade cases last year, a 58 percent jump over the year before.

    “There is the potential element of companies knowing that they’re dealing with a more sympathetic administration,” which may be prompting more complaints, said Scott Lincicome, a trade expert at the free-market oriented Cato Institute.

    The Department of Commerce can do subtle things to help companies succeed in these cases, he noted, like offering better guidance in how to draft complaints. But Lincicome said the number of trade cases were already on the rise before the last election. These things always tend to “come in waves,” he added.

    The Metal Box International plant, which employs about 100 people, was building Husky brand tool chests for Home Depot one recent day, with workers clustered around an assembly line inserting drawers into the boxes as they rumbled down the line.

    The metal-bending machines Liss bought are already lined up in the middle of the plant, but not yet operational. Ever thrifty, Liss bought the machines from a company that reconditions equipment, rather than splurging on new.

    “I bought these for $75,000,” he said. “New, each would cost $250,000.”

    Liss said most workers here are unaware how close the plant came to shutting down or how tenuous the situation remains. And even those who do know, like the director of operations Tom St. Germain, tend not to talk about the political atmosphere that seems to be helping U.S. producers like them.

    Germain said he likes President Trump, but added that “if he shut his mouth and did his job, he’d be more successful.”

    Liss calls St. Germain almost every day to check whether big orders are rolling in.

    These are early days, Liss said, so it still might happen. Retailers may have already stocked up on imports as they anticipated the trade ruling in favor of the domestic producers.

But this would normally be a busier time, since Father's Day -along with Black Friday and Christmas - are the highpoints of their annual selling cycle.   

    Still, each week that passes without a surge of orders adds to his worry and confusion. At the moment, he says “we’re back to being a little stressed out.”  

Edited by SHMET