Sunday

5th Apr 2020

Trump starts countdown to EU trade war

  • US allies said Trump 'security' justification hard to understand (Photo: whitehouse.gov)

US leader Donald Trump has imposed a 15-day countdown to an EU trade war set to hit steel, aluminium, cars, food, and other products.

"Today I'm defending America's national security by placing tariffs on foreign imports of steel and aluminium," he said in the White House on Thursday (8 March) surrounded by US steel workers.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • European steel makers fear overcapacity as China diverts products from US to EU (Photo: Tata Steel Europe)

Foreign "dumping" of cheap metals was responsible for "shuttering [US] plants and mills … laying off millions of workers and the decimation of entire communities," he said.

"We want to build our ships, build our planes, our military equipment with aluminium and steel from our country," he added.

He exempted Canada and Mexico from the tariffs, which are to come into effect on 23 March, due to ongoing talks on a North American trade accord.

He also said he would show "great flexibility and cooperation for those who were truly friends of ours both in trade and security terms," but he did not exempt the EU.

The EU's first response came from trade commissioner Cecilia Malmstroem.

"The EU is a close ally of the US and we continue to be of the view that the EU should be excluded from these measures," she said on Twitter.

She said she would "seek more clarity" when she met Trump's trade chief, Robert Lighthizer, in Brussels on Saturday.

The European Commission had earlier said it might impose tariffs on US motorbikes, jeans, bourbon, tobacco, oranges, and peanut butter in response, threatening a trade war that could escalate to also hit German exports of cars to America.

The EU's jobs and growth commissioner, Jyrki Katainen, urged caution on Friday.

"We must avoid the temptation of unilateral moves," he said at an event in Brussels organised by AmCham, the US chamber of commerce.

"There is a risk of breaking up the rules-based [global trade] system … It's time to be responsible and to keep long-term interests in mind," he added.

"The EU is not the problem in this case … we trade fairly," he said

French economy minister Bruno Le Maire said on Thursday there would be "only losers" on both sides in a trade war.

But French foreign minister Jean-Yves Le Drian called for "a strong response." "Europe must show its sovereignty, its power," he said.

EU industry

EU steel and aluminium producers echoed the politicians.

"The US measure baselessly includes EU producers, who will suffer significantly from the loss of one of its major export markets," Axel Eggert, the head of the European steelmakers lobby, Eurofer, said.

"The loss of exports to the US, combined with an expected massive import surge in the EU, could cost tens of thousands of jobs", he added.

Gerd Goetz, the head European Aluminium, said the US measures "could have severe economic consequences for SME's [small and medium-sized enterprises] in countries such as Germany, Italy, France, Spain, Sweden and in central and east European countries."

"If we do not act immediately, Europe is at risk of losing a strategic industry," he said.

With the UK angling for a free-trade deal with the US after it leaves the EU next year, Gareth Stace, the director of UK Steel, also despaired.

"Imposing such measures on US allies in the name of national security is difficult to comprehend," he said.

Wider outcry

Australia, China, Japan, and South Korea joined the EU in criticising Trump's plan, with South Korea threatening to take action via the World Trade Organisation.

Canada and Mexico welcomed their exemptions, but said they would continue to oppose Trump's attack on free trade.

A handful of US politicians from Trump's Republican Party also rallied against him.

Jeff Flake, a Republican senator, said he would introduce an emergency bill to nullify Trump's order, adding: "I urge my colleagues to pass it before this exercise in protectionism inflicts any more damage on the economy".

US House speaker Paul Ryan said he feared "unintended consequences" on US firms that needed cheap metals to make their products.

"The US will become an island of high steel prices that will result in our customers simply sourcing our products from our overseas competitors and importing them into the United States," America's Precision Metalforming and National Tooling and Machining associations said.

EU 'ready' for trade showdown with US

The EU will immediately take countermeasures if the US imposes tariffs on European steel imports, the European Commission said.

Magazine

The EU and US in the age of Trump

America's face changed when Donald Trump replaced Barack Obama. But one year on, the foundations of the transatlantic relationship are still intact.

Analysis

Trump is 'gift' for China's EU agenda

The more harm Trump does to trans-Atlantic ties, the better for China's global interests, the author of a new study on Sino-European relations has said.

Agenda

'Selmayrgate' moves to the EU Parliament This WEEK

As a global trade war looms over the new US steel tariffs, the EU's attention will shift to Strasbourg - where MEPs are expected to debate the Martin Selmayr appointment, trade, Brexit, journalism and the budget.

EU insists on US tariffs exemption

Europe is "an ally, not a threat", the EU Commission says - as the US is poised to impose duties in steel and aluminium. Common action on Chinese steel overcapacity could help diffuse the crisis.

Vietnam sent champagne to MEPs ahead of trade vote

A trade deal with Vietnam sailed through the European Parliament's international trade committee and after its embassy sent MEPs bottles of Moet & Chandon Imperial champagne over Christmas.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Latest News

  1. EU's 'Irini' Libya mission: Europe's Operation Cassandra
  2. Slovak army deployed to quarantine Roma settlements
  3. Lockdown: EU officials lobbied via WhatsApp and Skype
  4. EU: Athens can handle Covid outbreak at Greek camp
  5. New push to kick Orban's party out of centre-right EPP
  6. EU launches €100bn worker support scheme
  7. Court: Three countries broke EU law on migrant relocation
  8. Journalism hit hard by corona crisis

Join EUobserver

Support quality EU news

Join us