March 9, 2018 / 8:29 AM / 12 days ago

EU to respond to U.S. tariffs within 90 days if not exempt

BRUSSELS (Reuters) - The European Union expects to be excluded from U.S. steel and aluminum tariffs but will go to the World Trade Organization to impose its own measures if Washington presses ahead, EU officials said on Friday.

U.S. President Donald Trump set import tariffs on Thursday of 25 percent on steel and 10 percent on aluminum 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 U.S. 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 U.S. 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.

European Commissioner Cecilia Malmstrom holds a news conference in Brussels, Belgium March 7, 2018. REUTERS/Eric Vidal

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.


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 U.S. 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 aluminum sectors hard.

“The loss of exports to the U.S., 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.

Aluminum producers’ association European Aluminum called for an “immediate” implementation of measures if necessary.

Reporting by Robin Emmott and Alissa de Carbonnel; Writing by Robert-Jan Bartunek; Editing by Catherine Evans

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