EU's Malmstrom says tariffs not way to solve overcapacity in steel sector

Clay Curtis
March 11, 2018

When we asked the European Commission if the United Kingdom could act unilaterally, we were told that as long as the United Kingdom was a member of the EU with its common trade policy this would not be possible. It intends to hit a range of United States goods with punitive tariffs in retaliation should the bloc face the United States import taxes.

Japan, he said, would stick to World Trade Organization rules in terms of taking measures.

The EU's top official on Wednesday warned US President Donald Trump against starting a trade war, as the bloc prepared to retaliate against Washington's threatened metals tariffs with duties on peanut butter, orange juice and bourbon whiskey.

"We're not looking for a trade war", Ross said.

Concessions could be required to protect the $7 billion in steel and aluminum exports the European Union sends each year to the United States.

European trade commissioner Cecilia Malmstrom met USA trade envoy Robert Lighthizer in Brussels on Saturday for what she described as "frank" discussions which "brought no immediate clarity". A senior EU official told EU Reporter that this was a clear case of protectionism, saying that the EU and USA are aligned on national security, on over-capacity and have taken firm action on anti-dumping. The EU will seek clarification on the mandate and basis for exclusion.

Fragkiskos Filippaios, of the University of Kent's business school in England, says that the damage from a trade dispute will depend on whether the sides try to resolve their differences through the arbitration of the WTO, whose verdicts have so far always been accepted.

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And on Thursday, while making the link between trade and national security, he repeated previous accusations that some American allies have not been paying their fair share on defense.

"It is certainly not the right way to include Europe in that because we are friends, we are allies, we work together, we can not possibly be a threat to national security in the we are counting on being excluded", Malmstrom said.

Saturday's meetings in Brussels had been previously planned but took on greater importance because of Trump's announcement of a 25-percent tariff on steel imports and 10 percent on aluminum imports. "We are talking about unilateral action against global rules".

Key U.S. trading partners and businesses have warned the tariffs could backfire, provoking a trade war and hurting allies like the European Union and Japan more than China, their main target.

The EU exported about 5.5 million tons of steel to the US past year.

The WTO said Wednesday that, so far, 18 members - including China, Australia, Brazil, the EU, India, Japan, Norway and Russian Federation - have expressed concerns about Trump's proposed tariffs.

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