Trump Tariffs Still Hitting US Allies
In the roller coaster ride that has been the process of rolling out the Trump steel and aluminum tariffs, President Donald Trump first announced measures against all imports into the United States, other than from Canada and Mexico. The administration later exempted several other US allies from the tariffs—at least temporarily—including South Korea, Australia, and the European Union—while also announcing procedures to apply for further exemptions.
Meanwhile US allies like the Middle Eastern island kingdom of Bahrain are still being left out in the cold. Home to the US Navy’s Fifth Fleet and its 20,000 sailors at the port of Manama, Bahrain was the world’s eighth-largest producer of aluminum in 2016, with 970,000 tons, accounting for 10 percent of the country’s economy. The kingdom has also taken recent steps to expand its aluminum production.
Following the announcement of the Trump tariffs, Bahrain has hired a high-profile US law firm, the Washington-based Miller and Chevalier, to help convince the Trump administration to ease the impact of new tariffs that could harm a US ally.
The Moody’s credit-rating agency says Bahrain will be among the hardest-hit countries by the tariffs. Aluminum made up 61 percent of the country’s exports to the US last year. Bilateral trade between the two countries has been growing steadily since they signed a free trade agreement in 2004.
The tariffs could also adversely impact other US allies in the region, including the United Arab Emirates and Qatar.
Meanwhile, the steel tariffs are also adding to the tension between the US and Turkey, two countries that once enjoyed a closer friendship than they have today. Turkey has also not received an exemption from the tariffs.
Turkish steel producers buy nearly four million tons of scrap steel from the US every year, exporting it back after processing, mostly as construction steel. Given the exemptions given to some countries, Turkey, a major steel producer, feels discriminated against by the tariffs.
Officials from Turkey’s Economy Ministry are in contact with their US counterparts in an effort to gain an exemption from the steel tariffs. The Turkish government has indicated the country might impose new tariffs on US agricultural and technology exports. The decrease in Turkish steel exports to the US could also lead Turkish steel producers to import less scrap steel from the US.
Turkey’s main opposition party is pushing for tariffs on cotton imports from the United States. Turkey imports $519 million of US cotton per year, roughly the equivalent of the $525 million of angular iron rods Turkey exports to the US.
Interestingly, the US ran a $3-billion trade surplus with Turkey last year. Now, some in Turkey want the principle of reciprocity to be applied to trade with the US, a concept that Trump has instituted as the cornerstone of his own trade policy.