The European Union is seeking a last-minute deal with the US to avoid inflaming global trade tensions as President Donald Trump prepares to impose tariffs on steel and aluminium imports at the end of the month.
"We're at the beginning of a decisive week," German economy minister Peter Altmaier said on Monday. "We have to try to avoid higher tariffs if possible and that means we're ready to agree with the Americans on points that are necessary in our mutual interest."
The US in March imposed levies of 25 per cent on steel imports and 10 per cent on aluminium imports, giving some regions, including the EU, a temporary reprieve that will expire on June 1st.
The EU has threatened to retaliate with duties on €2.8 billion of American products if tariffs go into effect. Washington offered the possibility of quotas set at 90 per cent of last year’s imports as an alternative to the tariffs, but the EU has said it would only accept a cap that would not be lower than last year’s level.
US commerce secretary Wilbur Ross and the EU's trade chief Cecilia Malmstrom will meet this week at an Organisation for Economic Co-operation and Development event in Paris, where trade ministers will hold intensive talks before the waiver deadline. And even though the EU has said it won't negotiate with the US until it has received an unconditional reprieve from the tariffs, Ms Altmaier said the bloc is willing to discuss trade in industrial goods and recognition of standards.
Jobs at stake
“We have to avoid a trade conflict because everyone suffers from it, the citizens in Europe just like the citizens in the US,” Mr Altmaier said. “Many jobs are also at stake.”
Europe's resolve against US actions that European Council president Donald Tusk has described as "capricious assertiveness" varies between member states, as export-dependent Germany has adopted a more conciliatory tone than France. In addition to the tariff threat, the US rattled continental capitals earlier this month announcing it would pull out of the landmark Iran nuclear accord which the remaining signatories – Russia, China, France, Germany and the UK, along with the EU – all say is working.
“We continue to engage with our US partners to avoid confrontation,” Ms Malmstrom told a business conference in Brussels on Monday, according to a copy of her prepared remarks. “We are free traders but we are not naive – and we follow multilateral rules every step of the way.”
A conflict between the US and the EU will only inflame global tensions, as the US has proposed tariffs on up to $150 billion in Chinese imports, which Beijing has said it’s prepared to retaliate against. The Trump administration also opened a new front, launching a probe into whether auto imports imperil national security.
“We will use the time from today until Wednesday, until the beginning of the OECD conference, to talk about a deal that’s in the interest of both sides,” Altmaier said.
Any new tariffs on aluminium imports into the US will impact on the Aughinish Alumina plant in Limerick. Aughinish provides alumina to some of the biggest users of aluminium in Europe who then export their products to the US. Much of its output is used for aluminium in the car and aeronautical industries.
The firm is already caught up in US sanctions introduced last month targeting Russian individuals and businesses including Russian billionaire Oleg Deripaska, the majority shareholder in EN+ Group which in turn owns 48 per cent of Aughinish’s owner Rusal.
A delegation of Government officials visited the US earlier this month to tell senior figures in the Trump administration that Washington’s recent sanctions on Russian individuals and businesses had inadvertently placed the future of the plant “in jeopardy”. The US has extended the wind-down period or individuals doing business with Rusal and also indicated that it would provide sanctions relief to the company if Mr Deripaska relinquishes control. – Bloomberg