U.S. Allies Still Waiting for Tariff Relief on Autos, Steel

In return for billions of dollars of investment pledges and promises to buy more American goods, U.S. allies in Asia and Europe say President Trump agreed to lower tariffs on key exports such as cars and steel. Weeks later, they are still waiting.

- Jason Douglas

Earlier this year, Trump threatened many of the U.S.'s trading partners with lofty import duties. Then, in a rapid series of deals culminating this month, he lowered them in pacts that, in some cases, included pledges by those countries to invest in the U.S.

The administration, however, has so far left in place a series of tariffs levied for national-security reasons on sensitive products such as cars, steel, and aluminum.

The delays in addressing those tariffs—as well as discrepancies over investment and other issues—have created uncertainty for businesses and policymakers over future U.S. trade policy.

Japan and South Korea said agreements they struck with the U.S. included reducing to 15% a 25% tariff on imported automobiles—but for now that levy is still being collected, adding to mounting losses at some of the world's biggest carmakers. Toyota Motor estimates tariffs will cost it around $9.5 billion in lost operating profit in the fiscal year ending in March, an estimate that had assumed tariffs on U.S. car imports would be reduced this month.

Even the U.K., which was the first country to agree to a new trade pact with Trump back in May, is still waiting for a reduction in steep tariffs on steel. The two sides are thrashing out final terms on exactly which U.K. steel exports will qualify.

A U.S. administration official said the U.S. agreed to discuss and possibly adjust these so-called Section 232 tariffs but said the administration didn't make a firm commitment to change them as part of these initial agreements.

Such teething problems illustrate the challenge of putting Trump's rapid-fire trade pacts into practice.

Traditional trade agreements run to hundreds of pages and seek to define clear rules for cross-border commerce to encourage companies to take the risky step of engaging in international trade. Trade lawyers painstakingly haggle over tariffs and regulatory barriers to broaden market access.