Everyone loses in a trade war: Belgian FM

sofia — The European Union warned about the costs of a transAtlantic trade war while bracing for one to erupt after the US signalled it will reject the bloc’s demand for an unconditional waiver from metals-import tariffs.

“A trade war is a losing game for everybody,” Belgian Finance Minister Johan Van Overtveldt told reporters in Sofia, Bulgaria, on Saturday.

“We should be very careful about this, we should stay cool when we’re thinking about reactions but the basic point is that nobody wins in a trade war so we try to avoid it at all costs,” he said ahead of a meeting with his peers from the world’s largest trading bloc.

Donald Trump’s administration is asking Europe, Canada and other allies to accept quotas in exchange for an exemption from steel and aluminum tariffs that kick in May 1, when a temporary waiver expires. “We are asking of everyone: quotas if not tariffs,” Commerce Secretary Wilbur Ross said on Friday.

This puts the EU in the difficult position of either succumbing to US demands that could breach international commerce rules or face punitive tariffs. Forcing governments to limit shipments of goods could violate World Trade Organisation rules, which prohibit so-called voluntary export restraints. It’s also contrary to the entire trade philosophy of the 28-nation bloc, which is founded on the principle of the free movement of goods.

The White House last month temporarily shielded some trading partners including the EU from the duties, at 25 per cent for imported steel and 10 per cent for aluminum on the grounds of protecting national security. — Bloomberg