EU braces for US to go ahead with steel and aluminium tariffs
Europe’s trade chief says no clarity on US tariffs ahead of deadline
BRUSSELS, May 22, (Agencies): The European Union expressed doubt Tuesday that US President Donald Trump will accept an offer of trade talks and other incentives to permanently exempt the bloc from punishing tariffs on steel and aluminum exports next week.
In March, Trump imposed tariffs of 25 percent on steel imports and 10 percent on imported aluminum, but granted the 28 EU countries an exemption until June 1. He also temporarily excluded big steel producers Canada and Mexico, provided they agree to renegotiate a North American trade deal to his satisfaction.
Should a permanent exemption be granted, the EU stands ready to deepen transAtlantic energy cooperation, notably on liquefied natural gas, improve reciprocal market access for industrial products and work together to reform World Trade Organization rules.
“Is this going to be enough? I’m not sure frankly,” Trade Commissioner Cecilia Malmstrom told reporters in Brussels after discussing the tariffs with EU ministers.
“There have been signals from the US that the exemptions will not be prolonged. So either they will be imposed on us the first of June, or there will be other sorts of limiting measures,” Malmstrom said. She did not elaborate on what those measures might be.
Malmstrom pointed out that she and US Secretary of Commerce Wilbur Ross speak about the problem several times a week, but she conceded that “the final decision on this will be made personally by the president.”
Convinced that the US move breaks global trade rules, the EU has drawn up a list of “rebalancing” duties worth some 2.8 billion euros ($3.4 billion) to impose on US products if it is not permanently exempt. It has vowed not to negotiate under threat.
“The moment the threat is lifted, we are ready to talk,” French Foreign Minister Jean-Yves Le Drian said.
The EU, the world’s biggest trading bloc, rejects Trump’s argument that the tariffs are needed to protect national security. Most EU countries are US partners in NATO.
“We think that they are not legitimate, and they go against the WTO,” Malmstrom said.
Malmstrom said Tuesday that the EU still has no idea whether US President Donald Trump will slap tariffs on the bloc’s steel and aluminum exports next week.
“We have no clarity yet,” Malmstrom told reporters in Brussels as EU ministers gathered for talks on trade. She noted that she and US Secretary of Commerce Wilbur Ross speak several times a week.
Should the tariffs be dropped, the EU stands ready to deepen trans-Atlantic energy cooperation, notably on liquefied natural gas, improve reciprocal market access for industrial products and work together to reform WTO rules.
Agreement
“Time is running out,” German Economy Minister Peter Altmaier warned. “Whether we succeed in preventing punitive tariffs from taking effect on June 1 is a completely open question — but we should leave nothing untried to prevent that, and we should work for an agreement.”
“We want to avoid a trade war,” he said, adding that it’s important “to avoid mutual increases in tariffs, because that would lead to citizens and consumers paying the price, and we want to rule that out.”
The ministers will take encouragement from the US-China development on Sunday with Washington and Beijing backing off from tit-for-tat tariffs after reaching an as-yet unspecified accord on slashing the massive American trade deficit with China.
The European Union has said it refuses all trade talks with the United States unless Washington grants a permanent exemption from the painful steel and aluminium tariffs that are set to kick in on June 1.
“We are allies but we are not vassals. Today is a moment of truth for the EU,” said French trade minister Jean-Baptiste Lemoyne as he arrived for the talks.
EU trade ministers will discuss a plan laid out by EU leaders at a summit last week for a limited EU-US trade deal as well as opening up the European market to US natural gas — if the exemption is granted.
Europe’s incentives come with a threat to retaliate against the US with European tariffs on American imports, including iconic items such as HarleyDavidson motorbikes.
These counter-measures will officially become enforceable on June 20, but Europeans have committed to not use them as long as talks with the US are ongoing.
Any attempt to negotiate a trade deal, no matter how small, requires a mandate from member states, which the ministers are expected to discuss over lunch on Tuesday.
The “limited” deal would focus in particular on cars, a strategic sector that Trump has brought sharp attention to in several tweets that specifically targeted Germany — an auto powerhouse on its own.