Saturday

26th May 2018

EU insists on US tariffs exemption

  • Chinise overcapacities on the steel market will be on the agenda of EU-US talks over the weekend to diffuse the crisis. (Photo: Cheryl Marland - Flickr)

The EU is trying to be exempted from tariffs on steel and aluminum to be imposed by US president Donald Trump and avoid a trade war between close allies.

"Europe is certainly not a threat to American internal security, so we expect to be excluded," EU trade commissioner Cecilia Malmstroem said in Brussels in Friday.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

She insisted that "nobody has an interest of escalating this situation."

Malmstroem will meet US trade representative Robert Lighthizer on Saturday, along with Japan's trade minister Hiroshige Seko.

She will argue that EU companies are not state-subsidised nor in overcapacity, and that therefore they are not a source of "unfair trade" with the US.

She will also insist that US tariffs fail to address the main problem on the global steel market: China's overcapacity by state-owned companies.

"We agree on the problems, not on the remedy," said an EU official on Friday, insisting that tariffs are "a prescription for the wrong illness".

"Overcapacities will be on the agenda" of Saturday's meeting, European Commission vice president Jyrki Katainen confirmed. 

He warned however that the dispute will not be solved on Saturday.

"Tomorrow's meeting is a meeting, not the meeting," he said, adding that "most probably the discussion will continue."

He added that the EU was still preparing to impose counter-measures, including tariffs on US products.

"We are hoping we are not forced to use them," he said, but warned that "if the worst case scenario happens, we are ready to take the US to the WTO [World Trade Organization] court."

When signing the proclamations imposing 25-percent tariffs on steel and 10-percent tariffs on aluminum, Trump said that he would show "great flexibility" for "real friends".

"We want to get as much clarity as possible," said Katainen who insisted that the EU is "an ally, not a threat" to the US.

He also rejected US attempts to negotiate bilateraly with EU countries, saying that the EU expected "to be treated as a trading bloc."

The UK however cracked EU unity, with trade secretary Liam Fox saying that the UK will look at how it could "maximise [its] case for exemption under these particular circumstances."

In private, the US administration has also stressed that Chinese overcapacity is a common challenge for both the US and the EU.



The White House is expected to ask the EU and other countries like Japan to tackle more strongly the issues, as well as other issues identified by the US, such as intellectual property theft or transfer of technologies.

In that context, the tariffs and the possibilities of exemptions are a leverage Trump could use to get other countries following his line over China.

Trump's tariffs have been met with widespread opposition, including from the business sector.

"Unilateral actions which could be followed by counter-measures help no one," said Maxime Bureau, chairman for Europe of AmCham, the US chamber of commerce.

Bureau urged the EU and the US to "find solutions in the coming days."

The potential trade war - a expression that EU leaders and Brussels officials are keen to avoid - comes at a time of booming transatlantic economic relations.

"The transatlantic economy is powering ahead," said AmCham and the Johns Hopkins University's Center for Transatlantic Relations in their annual reports on the transatlantic economy.

The report, published on Friday, noted that 54 percent of global investment into the US comes from Europe, and that 64 percent of US global investment goes to Europe.

"Economics trumped politics in 2017," the report said, referring to a relatively healthy economy despite concerns over Trump's protectionism and aggressiveness towards the EU.

The dispute over steel and aluminium comes "when times are good, despite Brexit and Trump's election", said Joseph Quinlan, a Senior Fellow at the Center for Transatlantic Relations, who coordinated the report.

He told EUobserver that he was "cautious but optimistic" about the current dispute.

He said he expected that "tariffs will be more narrowly defined" after discussions.

"Washington realises that the economic consequences would be detrimental to business," he pointed out.

"US companies have to do business in Europe, and it's the same for European companies in the US."

Trump starts countdown to EU trade war

EU sales of steel to US to face 25 percent tariff from 23 March, with Europe to hit back on motorbikes and bourbon in looming trade war.

Trump keeps EU leaders waiting on tariffs

European leaders postponed their reaction to US announcement that the EU would be exempted from tariffs on steel and aluminium. "The devil is often in the details", said the Belgian PM.

Analysis

EU has no 'magic bullet' against US Iran sanctions

EU leaders in Sofia will discuss how they can protect the bloc's economic interests against US threats to sanction companies doing business in Iran. But their options are limited.

Opinion

EU budget must not fortify Europe at expense of peace

Given the European Commission new budget's heavy focus on migration, border management and security, many are asking whether the proposal will fortify Europe at the expense of its peace commitments.

News in Brief

  1. Italy set to pick eurosceptic finance minister
  2. UK foreign minister fooled by Russian pranksters
  3. Rajoy ally gets 33 years in jail for corruption
  4. Close race as polls open in Irish abortion referendum
  5. Gazprom accepts EU conditions on gas supplies
  6. Facebook tells MEPs: non-users are not profiled
  7. Commission proposes ending France deficit procedure
  8. UK households hit with Brexit income loss

Stakeholders' Highlights

  1. Counter BalanceEuropean Ombudsman requests more lending transparency from European Investment Bank
  2. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  3. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  4. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  5. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  6. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  7. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  8. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  9. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  10. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  11. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  12. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach

Stakeholders' Highlights

  1. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May
  2. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  3. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  4. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  5. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  6. Mission of China to the EUProgress on China-EU Cooperation
  7. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  8. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  9. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  10. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  11. UNICEFCalls for the Protection of Children in the Gaza Strip
  12. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations