Europe Responds Swiftly to US Tariffs, Threatens Retaliation

Reaction to U.S. President Donald Trump’s decision to slap tariffs on steel and aluminum imports from American trading partners — including the European Union — came fast and furious, with threats of retaliation and warnings they risk sparking a trans-Atlantic trade war.

European Commission President Jean-Claude Juncker said the European bloc would respond by imposing penalties of its own on American exports.

“Today is a bad day for world trade,” said Cecilia Malmström, the European trade commissioner. EU officials previously informed the World Trade Organization of the bloc’s plan to levy duties on $7.2 billion worth of U.S. exports if the Trump administration proceeded with threats to impose a 25 percent tariff on steel imports and 10 percent on aluminum.

Canadian and Mexican officials also threatened retaliatory responses but have as yet not indicated which U.S. products they will target. Both countries had hoped that the White House would continue to exempt them from the tariffs. 

National security cited

Europe, along with Canada and Mexico, had been granted a temporary reprieve from the U.S. tariffs after they were unveiled in March by Trump, who said the levies were needed to stem the flood of cheap steel and aluminum into the U.S. and that to impose them was a national security priority.

In Europe, there was disappointment, but less surprise. 

Juncker called the U.S. action “unjustified” and said Europeans had no alternative but to respond with tariffs of their own and to lodge a case against Washington with the World Trade Organization in Geneva. “We will defend the union’s interests, in full compliance with international trade law,” he said.

The EU had already publicly announced that in the event tariffs did go ahead, it would impose levies on Levi-made jeans, Harley-Davidson motorbikes and bourbon whiskey.

British officials appeared the most alarmed. The government of Theresa May had pinned post-Brexit hopes on securing a trade deal with the U.S., and the imposition of tariffs on steel is adding to fears that negotiating a quick trade liberalization agreement with Trump looks increasingly unlikely.

“We are deeply disappointed that the U.S. has decided to apply tariffs to steel and aluminum imports from the EU on national security grounds,” a government spokesman said. “The U.K. and other European Union countries are close allies of the U.S. and should be permanently and fully exempted.”

Discussion at summit

He said the British prime minister planned to raise the tariffs with the U.S. president personally in Canada at a scheduled G-7 summit of the seven largest advanced economies. That summit is likely to be a frosty affair, much like last year’s in Taormina, Sicily. 

With a week to go before the June 7-8 summit, there’s still no final agreement on the agenda, British and Italian officials said. Canadian Prime Minister Justin Trudeau had earmarked climate change, women’s rights and economic growth as key issues, but there has been pushback from Washington. Thursday’s tariff announcement by the White House will further complicate agreeing on a G-7 agenda.

German reaction to the announcement of the tariffs was among the fiercest. Chancellor Angela Merkel dubbed them “illegal.” Manfred Weber, a key ally of the German chancellor and leader of the biggest bloc in the European Parliament, accused the Trump administration of treating American allies as enemies.

“If President Trump decides to treat Europe as an enemy, we will have no choice but to defend European industry, European jobs, European interests,” he said. “Europe does not want a trade conflict. We believe in a fair trade regime from which everybody benefits.” 

Wilbur Ross, U.S. commerce secretary, who’s in Europe and has been pressing the EU to make concessions to avert the tariffs, dismissed threats of a trade war, saying retaliation would have no impact on the U.S. economy. He held out hope that the tariffs could be eliminated, saying, “There’s potential flexibility going forward. The fact that we took a tariff action does not mean there cannot be a negotiation.” 

Business leaders cautious

Some European business leaders have urged their national leaders to be restrained in response, fearing a tit-for-tat spiral could be triggered quickly. Britain’s Confederation of British Industry warned against overreaction, saying no one would win on either side of the Atlantic if a major trade war erupted.

The director of UK Steel, Gareth Stace, said he feared there was clear potential for a damaging trade war.

“Since President Trump stated his plans to impose blanket tariffs on steel imports almost three months ago, the U.K. steel sector had hoped for the best, but still feared the worst. With the expiration of the EU exemption now confirmed to take effect tomorrow [June 1], unfortunately, our pessimism was justified, and we will now see damage not only to the U.K. steel sector but also the U.S. economy.” 

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US Slaps Tariffs on Steel, Aluminum from EU, Canada, Mexico  

The United States is escalating trans-Atlantic and North American trade tensions, imposing a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico beginning on Friday.

The U.S. also negotiated quotas or volume limits on other countries, such as South Korea, Argentina, Australia and Brazil, instead of tariffs, Commerce Secretary Wilbur Ross also told reporters by telephone. 

President Donald Trump has repeatedly said such measures are necessary to protect American jobs and industries in key manufacturing sectors. 

“The president’s actions are about protecting American steel, American aluminum,” a White House spokesman, Raj Shah, said on Fox News. “They’re critical for national security.”

But the negative reaction from some of America’s most important strategic allies has been quick and fierce.

Canadian Prime Minister Justin Trudeau called the tariffs “totally unacceptable” and vowed retaliation. 

“This decision is not only unlawful, but it is a mistake in many respects,” said French President Emmanuel Macron, warning that “economic nationalism leads to war.”

France’s finance minister, Bruno Le Maire, who met Ross earlier on Thursday, said the U.S. shouldn’t see global trade like the Wild West or Gunfight at the O.K. Corral.

‘Bad day for world trade’

European Commission President Jean-Claude Juncker said the U.S. move marked “a bad day for world trade,” announcing there is “no choice” but to proceed with a World Trade Organization dispute settlement case and additional duties on numerous U.S. imports.

The retaliatory tariffs from the Europeans are expected to target several billion dollars’ worth of American goods, including such iconic American products as Harley Davidson motorcycles and Levi’s jeans, as well as Kentucky bourbon and Tennessee whiskey.

Ross, in Paris, interviewed on CNBC after the announcement, brushed off the retaliation saying, “It’s a tiny, tiny fraction of 1 percent” of trade.

Ross, a banker known for restructuring failed companies prior to joining Trump’s Cabinet, also predicted America’s trading partners “will get over this in due course.”

“The United States is taking on the whole world in trade and it’s not going to go well,” predicted Simon Lester, trade policy analyst at the libertarian Cato Institute.

The action is also not popular with some members of Congress, including those from Trump’s own party, whose states are dependent on exports. 

“Imposing steel and aluminum tariffs on our most important trading partners is the wrong approach and represents an abuse of authority intended only for national security purposes,” said Senate Foreign Relations Committee Chairman Bob Corker, a Tennessee Republican.

“You don’t treat allies the same way you treat opponents,” Republican Senator Ben Sasse of Nebraska said on Twitter. “Blanket protectionism is a big part of why we had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.’ ”

Tennessee has three major auto assembly plants. Nebraska is a significant exporter of cattle, corn, soybeans and hogs. 

Mexico said, in response, it will penalize U.S. imports, including pork bellies, apples, grapes, cheeses and flat steel.

“There’s a reason why” the countries are carefully selecting which American products to target in response, said William Reinsch, senior adviser at the Center for Strategic and International Studies.  

“Most of bourbon is made in Kentucky, which is the state of the Senate majority leader. Harley Davidsons are made in Wisconsin, which is the state of the speaker of the House,” Reinsch told VOA News. “Usually when other countries retaliate, and the Chinese have done something similar, is they’re good at maximizing political pain by picking out products that are made in places where people are politically important.”

“Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers,” said Republican Orrin Hatch, who chairs the Senate’s finance committee and is a longtime advocate of breaking down trade barriers. 

One side of equation 

Expected higher prices for U.S. consumers on some products is only one side of the equation, said Ross, who noted that steel and aluminum makers in the United States are adding employment and opening facilities as a result of the U.S. government action.

“You can create a few jobs, however, you’re going to lose more in the process,” as consuming industries will be placed at a disadvantage of paying more for raw materials compared to their foreign competitors, Lester told VOA News.

Christine Lagarde, managing director of the International Monetary Fund, is warning a trade war will also damage public trust in leaders. 

“First of all, those who will suffer most are the poorest, the less privileged people, those who actually rely on imported goods to have their living,” Lagarde said at a meeting in Canada of finance ministers and central bankers of the Group of Seven nations, adding that long-standing supply chains also would be disrupted.

Trump, in March, announced the United States would impose such tariffs, but he granted exemptions that expire Friday to the European Union and other U.S. allies.

The angst about global trade tensions helped send stock prices lower in the United States on Thursday. The Dow Jones industrial average fell 1 percent, while the broader S&P 500 was off nearly 0.7 percent.

Carol Castiel contributed to this report.

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Tom Cruise Tweets as Production Starts on ‘Top Gun’ Sequel

Tom Cruise is back on the flight line for a sequel to the 1986 film “Top Gun.”

The actor on Thursday tweeted a photo of himself as Navy pilot Pete “Maverick” Mitchell in a flight suit, looking at a fighter jet. The photo includes the phrase “feel the need.” In the original movie, Cruise’s character talks about how he feels the need for speed.

Cruise writes #Day 1 of production of “Top Gun: Maverick.”

The movie is scheduled for release in July 2019.

 

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Trump Renews Call for ABC Apology

U.S. President Donald Trump again asked the ABC TV network Thursday for an apology for reasons that were not entirely clear. The request came a day after the network canceled Roseanne Barr’s television show following racist remarks she posted about Valerie Jarrett, an African American who served as a White House adviser to President Barack Obama.

 

Trump’s request comes after he suggested Wednesday he should get an apology from Bob Iger, chairman and CEO of the Walt Disney Company, which owns ABC.

On Thursday, though, Trump was more direct when he tweeted: “Iger, where is my call of apology? You and ABC have offended millions of people, and they demand a response. How is Brian Ross doing? He tanked the market with an ABC lie, yet no apology. Double Standard!”

Trump did not elaborate on how the network offended people. ABC correspondent Brian Ross, however, was suspended for four weeks last year after erroneously reporting that Trump asked former national security adviser Michael Flynn to make contact with Russian officials before the 2016 U.S. presidential election.

Although ABC has not apologized directly to Trump for Ross’ error, the network issued a statement shortly after recanting the story that said, “We deeply regret and apologize for the serious error we made yesterday.”

Trump has not denounced Barr, who is white, for posting a tweet Tuesday that was later deleted saying Jarrett is a product of the Muslim Brotherhood and the “Planet of the Apes.” She later tweeted she was sorry “for making a bad joke” about Jarrett.

But White House spokeswoman Sarah Huckabee-Sanders said Wednesday Barr’s remarks were “inappropriate” and complained about the hiring of Trump critic Keith Olberman by ESPN, which is also owned by Disney. “This is a double standard that the president is speaking about.”

Barr’s offensive remarks triggered intense backlash, including ABC’s cancellation of her show which had been renewed for a second season.

“Roseanne’s Twitter statement is abhorrent, repugnant and inconsistent with our values, and we have decided to cancel her show,” said ABC entertainment President Channing Dungey.

Trump’s Twitter response Wednesday was somewhat surprising after Huckabee-Sanders said in response to a question about Barr Tuesday that he is focusing on trade, North Korea and other issues and “not responding to other things.”

After saying Tuesday she would stop tweeting, Barr resumed posting, blaming the effects of the sleep medication Ambien for her racist remarks in one of her more than 100 subsequent postings.

“guys I did something unforgivable so do not defend me. it was 2 in the morning and I was ambien tweeting — it was memorial day too — i went 2 far & do not want it defended — it was egregious indefensible. I made a mistake I wish I hadn’t but…don’t defend it please.”

 

The maker of Ambien, Sanofi S.A., responded to Barr’s claim saying, “While all pharmaceutical treatments have side effects, racism is not a known side effect of any Sanofi medication.”

Iger, who once considered challenging Trump for the presidency in 2020, indeed called Jarrett to inform her about the show’s cancellation.

“He wanted me to know before he made it public that he was canceling the show,” Jarrett said.

Jarrett has not commented on Trump’s response nor has Iger replied to Trump’s suggestion he was treated differently by the network.

Barr’s TV show was a new version of her 1988-97 sitcom “Roseanne.” It returned this year with Barr playing a character who is supportive of President Trump.

Barr in real life is an avid supporter of Trump. He hailed the new show two months ago for its strong ratings.

“Look at her ratings! Look at her ratings,” he said at a speech in Richfield, Ohio. “Over 18 million people,” Trump said, “and it was about us.” They haven’t figured it out yet; the fake news hasn’t quite figured it out yet. They have not figured it out. So that was great.”   

Trump’s response to the Barr controversy was not his only controversial remark in recent days. On Memorial Day, a solemn U.S. holiday to honor military personnel who died in the line of duty, Trump tweeted: “Happy Memorial Day! Those who died for our great country would be very happy and proud at how well our country is doing today. Best economy in decades, lowest unemployment numbers for Blacks and Hispanics EVER (& women in 18years), rebuilding our Military and so much more. Nice!”

The tweet drew criticism from some, including retired Admiral John Kirby, a State Department spokesman during the Obama administration.

“This is one of the most inappropriate, ignorant and tone-deaf things our Commander-in-Chief could have said on a day like today,” Kirby wrote on Twitter.

 

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Oregon’s Marijuana Story a Cautionary Tale for California

When Oregon lawmakers created the state’s legal marijuana program, they had one goal in mind above all else: to persuade illicit pot growers to leave the black market.

That meant low barriers to entry that also targeted long-standing medical marijuana growers, whose product is not taxed. As a result, weed production boomed — with a bitter consequence.

Now, marijuana prices here are in free fall, and the craft cannabis farmers who put Oregon on the map decades before broad legalization say they are in peril of losing their now-legal businesses as the market adjusts.

Oregon regulators on Wednesday announced they will stop processing new applications for marijuana licenses in two weeks to address a severe backlog and ask state lawmakers to take up the issue next year.

​California takes heed

Experts say the dizzying evolution of Oregon’s marijuana industry may well be a cautionary tale for California, where a similar regulatory structure could mean an oversupply on a much larger scale.

“For the way the program is set up, the state just wants to get as many people in as possible, and they make no bones about it,” Hilary Bricken, a Los Angeles-based attorney specializing in marijuana business law, said of California. “Most of these companies will fail as a result of oversaturation.”

A staggering inventory

Oregon has nearly 1 million pounds (453,600 kilograms) of marijuana flower, commonly called bud, in its inventory, a staggering amount for a state with about 4 million people. Producers told The Associated Press wholesale prices fell more than 50 percent in the past year; a study by the state’s Office of Economic Analysis found the retail cost of a gram of marijuana fell from $14 in 2015 to $7 in 2017.

The oversupply can be traced largely to state lawmakers’ and regulators’ earliest decisions to shape the industry.

They were acutely aware of Oregon’s entrenched history of providing top-drawer pot to the black market nationwide, as well as a concentration of small farmers who had years of cultivation experience in the legal, but largely unregulated, medical pot program.

Getting those growers into the system was critical if a legitimate industry was to flourish, said Sen. Ginny Burdick, a Portland Democrat who co-chaired a committee created to implement the voter-approved legalization measure.

Lawmakers decided not to cap licenses; to allow businesses to apply for multiple licenses; and to implement relatively inexpensive licensing fees.

The Oregon Liquor Control Commission, which issues licenses, announced Wednesday it will put aside applications for new licenses received after June 15 until a backlog of pending applications is cleared out. The decision comes after U.S. Attorney Billy Williams challenged state officials to address Oregon’s oversupply problem.

“In my view, and frankly in the view of those in the industry that I’ve heard from, it’s a failing of the state for not stepping back and taking a look at where this industry is at following legalization,” Williams told the AP in a phone interview.

But those in the industry supported the initial decisions that led to the oversupply, Burdick said.

“We really tried to focus on policies that would rein in the medical industry and snuff out the black market as much as possible,” Burdick said.

​Consolidation

Lawmakers also quickly backtracked on a rule requiring marijuana businesses have a majority ownership by someone with Oregon residency after entrepreneurs complained it was hard to secure startup money. That change opened the door to out-of-state companies with deep pockets that could begin consolidating the industry.

The state has granted 1,001 producer licenses and has another 950 in process as of last week. State officials worry if they cut off licensing entirely or turn away those already in the application process, they’ll get sued or encourage illegal trade.

Some of the same parameters are taking shape in California, equally known for black-market pot from its Emerald Triangle region.

The rules now in effect there place caps only on certain, medium-sized growing licenses. In some cases, companies have acquired dozens of growing licenses, which can be operated on the same or adjoining parcels. The growers association is suing to block those rules, fearing they will open the way for vast farms that will drive out smaller cultivators.

Beau Whitney, senior economist at national cannabis analytics firm New Frontier Data, said he’s seeing California prices fall.

In contrast, Washington knew oversupply could draw federal attention and was more conservative about licensing. As the market matured, its regulators eased growing limits, but the state never experienced an oversupply crisis.

Colorado has no caps on licenses, but strict rules designed to limit oversupply allow the state to curtail a growers’ farm size based on past crop yields, existing inventory, sales deals and other factors.

Chain stores

In Oregon, cannabis retail chains are emerging to take advantage of the shake-up.

A company called Nectar has 13 stores around the state, with three more on tap, and says on its website it is buying up for-sale dispensaries too. Canada-based Golden Leaf Holdings bought the successful Oregon startup Chalice and has six stores around Portland, with another slated to open.

William Simpson, Chalice’s founder and Golden Leaf Holdings CEO, is expanding into Northern California, Nevada and Canada. Simpson welcomes criticism that he’s dumbing down cannabis the same way Starbucks brought coffee to a mass market.

“If you take Chalice like Starbucks, it’s a known quantity, it’s a brand that people know and trust,” he said.

Amy Margolis, executive director of the Oregon Cannabis Association, says that capping licenses would only spur even more consolidation in the long-term. The state is currently working on a study that should provide data and more insight into what lies ahead.

“I don’t think that everything in this state is motivated by struggle and failure,” she said. “I’m very interested to see … how this market settles itself and (in) being able to do that from a little less of a reactionary place.”

​Craft growers

For now, Oregon’s smaller marijuana businesses are trying to stay afloat.

A newly formed group will launch an ad campaign this fall to tell Oregonians why they should pay more for mom-and-pop cannabis. Adam Smith, who founded the Oregon Craft Cannabis Alliance, believes 70 percent of Oregon’s small growers and retailers will go out of business if consumers don’t respond.

“We could turn around in three to four years and realize that 10 to 12 major companies own a majority of the Oregon industry and that none of it is really based here anymore,” he said. “The Oregon brand is really all about authenticity. It’s about people with their hands in the dirt, making something they love as well as they can. How do we save that?”

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Doctors Race to Vaccinate 1,000 People in Congo Against Ebola

Health workers in the Democratic Republic of Congo are racing against time to contain an outbreak of Ebola. So far, the World Health Organization reports at least 25 people have died out of the 58 people who have gotten the virus. VOA’s Carol Pearson reports that efforts to vaccinate people exposed to Ebola started more than 10 days ago.

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