EU warns US against tariff exemptions
Trump may soften strident stand, exclude Canada, Mexico and others
The EU warned US President Donald Trump on Thursday against letting individual states like Britain off global steel and aluminium tariffs, saying any such exemption would be viewed as applying to the whole bloc.
The White House signalled Wednesday it would water down plans for the contentious tariffs by exempting Mexico, Canada “and possibly other countries as well,” in the face of jitters on world markets.
But European Commission Vice President Jyrki Katainen said Brussels would not accept a carve-out for Washington’s close ally Britain, which has voted to leave the European Union but remains a member until 2019.
“What I have read today is that they are probably considering some exemptions to NAFTA [North American Free Trade Agreement] countries... but also they have mentioned the UK and maybe some other countries,” Katainen told reporters.
“So if they try to make [an] exemption for one of our member states it means the EU as a whole.”
Finnish former prime minister Katainen said Brussels had contacted US authorities “intensively” in recent days “to try to convince them not to trigger any major damages to the US economy and the world economy.”
The European Union sounded a stern warning Wednesday as it readied to retaliate with US-targeted tariffs of its own on everything from steel to peanut butter, orange juice, cranberries, bourbon and denim jeans.
“Trade wars are bad and easy to lose,” EU President Donald Tusk said on Wednesday, directly rebuffing Trump’s assertion last week that they were “good and easy to win.”
Trump’s team played down talk of a trade war Wednesday as it fought to limit a financial market sell-off, promising a quick decision on contentious tariffs that prompted a popular economic advisor to the president to quit.
Administration big guns Commerce Secretary Wilbur Ross and Treasury Secretary Steve Mnuchin rushed to the cameras to calm market jitters over proposed steel and aluminum duties, which they indicated were still negotiable and would not hurt growth.
As markets fell on news that Wall Street favorite Gary Cohn had resigned from the White House in protest at Trump’s trade decision and global partners vowed retaliation, Ross tried to calm fears of a trade war.
“We’re going to have sensible relations with our allies,” he told CNBC, claiming that Trump’s policy was well “thought through. We’re not looking for a trade war.”
Mnuchin joined the effort, claiming that the tariffs, which are not yet finalized, would not hurt the administration’s projections for three percent growth. “We’re comfortable that we’re going to manage through this so that it is not detrimental to our growth projections,” he told Fox Business.