EU expects exemption from US steel and aluminium tariffs

Trade commissioner to meet US trade representative in Brussels over weekend

US president Donald Trump gives out pens he used to sign presidential proclamations placing tariffs on steel and aluminium imports to workers from the steel and aluminium industries at the White House. Photograph: Leah Millis/Reuters

US president Donald Trump gives out pens he used to sign presidential proclamations placing tariffs on steel and aluminium imports to workers from the steel and aluminium industries at the White House. Photograph: Leah Millis/Reuters

 

European Union trade chief Cecilia Malmstrom vowed to press for a European Union exemption from United States tariffs on foreign steel and aluminium when she meets her American counterpart in Brussels on Saturday.

US president Donald Trump gave the green light on Thursday to the import levies on national-security grounds while sparing Canada and Mexico and giving his top trade negotiator, Robert Lighthizer, scope to work out exemptions for more countries.

“Europe is certainly not a threat to American internal security, so we expect to be excluded,” Ms Malmstrom, the trade commissioner, told reporters in Brussels on Friday. “We are counting on being excluded.”

The EU has become increasingly exasperated with Trump’s “America First” agenda, viewing it as a threat to the multilateral trade order that the US played a leading role in building after the second World War.

Two days ago, Ms Malmstrom described the national-security argument that Mr Trump has used to justify the 25 per cent tariff on foreign steel and 10 per cent levy on imported aluminium as “alarming” and “deeply unjust”.

The EU intends to hit a range of US goods with punitive tariffs in retaliation should the bloc face the US import taxes.

Iconic brands

In response to the steel measure, the EU is targeting €2.8 billion of imports of US goods including Harley-Davidson motorbikes, Levi Strauss jeans and bourbon whiskey. In addition to such iconic brands, the American products that would face a tit-for-tat EU tariff of 25 per cent range from steel bars and motor boats to T-shirts and orange juice, peanut butter and cranberries.

Beyond imposing retaliatory tariffs on US goods, the EU is prepared to file a case at the World Trade Organisation against the Trump administration in cooperation with other countries and to introduce “safeguard” measures to prevent steel shipments from other parts of the world to America from being diverted to the European market and flooding it.

“We will go to the WTO, possibly with some other friends,” Ms Malmstrom told a Brussels conference on Friday. “We will have to protect our industry.”

She said her meeting with Mr Lighthizer, the US trade representative, was scheduled “many months ago” to address, among other things, global steel overcapacity.

Special relationship

Ms Malmstrom warned the Trump administration against considering metal-tariff exemptions for only some EU countries such as the UK, which, while long considering that it has a special relationship with the US, is behind the bloc on the issue, she said.

“Our presumption is that the EU is a whole body and that the US will respect that,” Ms Malmstrom said. “Otherwise that is questioning the whole EU as a project, which is quite dramatic. And our UK friends have been crystal clear in working on European unity.”

Robert Zoellick, who served as US trade representative under president George W Bush, told the Brussels conference that the Geneva-based WTO risks being shaken by Trump’s decision to base the steel and aluminium import levies on national-security considerations.

The White House move came after probes by US commerce secretary Wilbur Ross under a little-used part of a Cold War-era American law. The Geneva-based WTO has never ruled on a dispute involving trade restrictions justified on national security grounds.

“Here’s the risk: the WTO decides, well, the EU or whoever brings action is right, this isn’t really national security,” Mr Zoellick said. “But then what happens when Wilbur Ross or somebody else says: ‘Wait a minute. Those people in Geneva can decide what is in America’s national security [interests]? Should we be part of the WTO?’ Or, the reverse, the WTO says: ‘Well, we let countries decide their own national security.’ Then you’ve created a very big loophole.” – Bloomberg