EU ready for talks with US to fix trade row

Malmstrom takes swipe at Washington’s protectionist policies

The EU is ready to engage with the US to solve a trade row triggered by its decision to impose tariffs on European metals, EU Trade Commissioner Cecilia Malmstrom said on Thursday.

Describing the US tariffs as “illegal” and contravening World Trade Organization (WTO) rules, Malmstrom said there was no choice but to take retaliatory action to protect European interests and jobs.

“We think it is ridiculous to consider the EU as a threat to US national security,” she told a seminar. “We are always open to talk with the US. The whole EU is based on the idea that we talk.”

The EU will begin charging import duties of 25 percent on a range of US products on Friday, in response to US tariffs put on EU steel and aluminium early this month, Malmstrom said.

The US, after imposing punitive tariffs on a number of its top trading partners, this week threatened China with further duties on $200 billion worth of trade, escalating a conflict that has already drawn retaliatory steps from around the world.

Visiting New Zealand to begin talks on a free-trade agreement, Malmstrom sought its support to stand up for an open, rule-based trade system that she said was under threat from friction between the US and other major economies.

Malmstrom said she was “very worried” about the situation, as it could escalate into a “full trade war” that would disrupt global supply chains and damage the world economy.

She also took a swipe at US President Donald Trump’s protectionist policies, voicing concern that some countries were “acting outside” rules agreed upon jointly at the WTO.

“New Zealand is a friend, an ally. Together we stand up for common values ... of sustainable trade, open trade, transparent trade, and trade that is done in compliance with international rules in the multilateral system,” she told a briefing after meeting New Zealand trade minister David Parker.

New Zealand is a strong advocate of free trade, and pushed hard with Japan for renegotiating a Trans-Pacific Partnership (TPP) deal after Trump’s decision to pull the US out.

Mercedes-Benz maker Daimler shocked investors on Thursday with a warning that trade tensions were hitting sales, while fears of a “titfor-tat” trade war grew as Europe readied retaliatory tariffs against the US.