Trump Administration May Link Steel Tariff Exemptions to Nato Military Spending

US allies looking to avoid being imposed with Donald Trump’s new tariffs on steel and aluminum may have to increase their financial contributions to Nato, Treasury Secretary Steven Mnuchin has suggested amid reports the EU has warned it is prepared to react to US president’s move.

In a controversial move on Thursday, Trump imposed steep tariffs of 25 percent for steel and 10 percent for aluminum imports to the US.

The trade sanctions will come into force in two weeks’ time. Trump temporarily exempted its North American neighbors, Canada and Mexico, from the newest measures.

Trump signed proclamations at a ceremony at the White House while surrounded by steelworkers.

Mr Mnuchin told CNBC that Mr Trump would consider national security when determining which countries could be exempt from the tariffs, noting that the President wants to ensure that Nato gets more funding from European allies.

“If we’re in Nato, he wants to make sure that Nato gets more money so that Nato can protect all of us and fulfill its goal,” Mr Mnuchin said. The President, who has criticized European countries for not contributing enough to the military alliance, has pushed Nato allies to spend at least 2 per cent of their GDP on defense.

Mr Trump’s alleged authority to impose sweeping tariffs on steel and aluminium stems from a Commerce Department investigation that concluded last month that imported metal threatened national security by degrading the American industrial base.

The President’s protectionist move drew opposition from world leaders and members of his own political party. After a week of intense lobbying, he agreed to exempt Canada and Mexico from the tariffs, which go into effect later this month.

Unless they also receive exemptions, South Korea, China, Japan, Germany, Turkey and Brazil could be hit by the tariffs.

While imposing the tariffs, Trump had said, “A strong steel and aluminum industry are vital to our national security, absolutely vital,” he said. “Steel is steel. If you don’t have steel, you don’t have a country.

“Our industries have been targeted for years and years – decades, in fact – by unfair foreign trade practices leading to the shuttered plants and mills, the laying-off of millions of workers and the decimation of entire communities. And that’s going to stop.”

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