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EU to respond to US tariffs within 90 days if not exempt

Reuters , Friday 9 Mar 2018
Cecilia Malmstrom
European Commissioner Cecilia Malmstrom holds a news conference in Brussels, Belgium March 7, 2018 (Photo: Reuters)
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The European Union expects to be excluded from US steel and aluminium tariffs but will go to the World Trade Organization to impose its own measures if Washington presses ahead, EU officials said on Friday.

US President Donald Trump set import tariffs on Thursday of 25 percent on steel and 10 percent on aluminium but exempted Canada and Mexico and offered the possibility of excluding other allies, backtracking from an earlier stance.

The EU's trade chief Cecilia Malmstrom will meet with US Trade Representative Robert Lighthizer in Brussels on Saturday but the EU executive said the talks would not solve all the problems.

Striking a defiant tone, European Commission Vice President Jyrki Katainen called Trump's speech protectionist, saying it remained unclear how a potential exclusion process would work.

"To my ears it sounded very protectionist: economy without competition," Katainen told reporters. "We have to chose whether we want rules-based trade ... or whether we want the rule of force, the rule of the strongest, which we have now seen."

EU officials said that while they shared US concerns about overcapacity in the steel sector, tariffs were not the answer, and stressed Europe's historic ties to the United States.

"We are an ally, not a threat," Katainen said.

The officials said all EU countries, including Britain which is leaving the EU, were behind the Commission, which handles trade issues for the 28 governments.

90 Days

European Commissioner Malmstrom, who coordinates policy for the 28-nation EU, the world's biggest trading bloc, said she stood ready to go to the WTO, the international trade arbiter, to impose the bloc's own safeguards within 90 days.

"We have been very clear that (the US decision) is not in compliance with the WTO," she said. "We will have to protect our industry with rebalancing measures, safeguards."

Safeguards are temporary tariffs. Under WTO rules, the EU can retaliate in a proportionate manner if they do not receive compensation for new trade restrictions within 90 days.

European industry associations called on Malmstrom to respond if the EU was subjected to the tariffs, saying they would hit the steel and aluminium sectors hard.

"The loss of exports to the US, combined with an expected massive import surge in the EU, could cost tens of thousands of jobs in the EU steel industry and related sectors," said Axel Eggert, head of steel association EUROFER.

Aluminium producers' association European Aluminium called for an "immediate" implementation of measures if necessary.

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