19 03 2018

EU Expects To Be Excluded From US Steel Tariffs

The EU expects to be excluded from the scope of the US's new tariffs on imports of steel and aluminum, according to the bloc's Vice-President for Jobs.

Jyrki Katainen said that the Commission expects that the EU "as a whole will be excluded as a key political, security, and economic partner that trades fairly with the US." He added that the Commission hopes that "the process of exclusion of EU steel and aluminum exports... will be expedited, transparent, and smooth."

The US has announced the imposition of a 25 percent tariff on imports of steel and a 10 percent tariff on imports of aluminum from all countries. Canada and Mexico are exempted in each case. The measures will enter into force the night between March 22 and March 23.

The Department of Commerce has alleged that the current level of aluminum and steel imports in the US has the potential to threaten national security. The White House maintains that further closures of domestic steel and aluminum facilities could render the country unable to produce enough steel and aluminum to meet defense and critical industry needs in the event of a national emergency.

According to President Trump's proclamation, any country with which the US has a "security relationship" is "welcome to discuss... alternative ways to address the threatened impairment of the national security caused by imports from that country." Should Trump decide that "imports from that country no longer threaten to impair the national security," he may remove or modify the import restrictions and adjust the tariff accordingly.

EU Trade Commissioner Cecilia Malmstrom warned that "justifying tariffs on the basis of national security considerations risks undermining the multilateral trading system." She explained that the EU suspects that the announcement "is effectively not based on national security considerations but an economic safeguard measure in disguise."

Malmstrom said she had made clear to the US Trade Representative (USTR) that the EU is disappointed that "longstanding allies and security partners from Europe need to justify their exports of steel and aluminum and to prove that they are not a threat to US national security." She added that the EU is seeking further clarity from the US on possible exemptions and has been informed that the USTR will soon publish an outline of the procedures for the exemptions.

Malmstrom said that if the EU is not excluded from the measures, it would take "a firm and resolute, but proportionate, response." The EU is in discussion with other countries affected by the US's announcement in an effort to see if they can "coordinate [their] rights in the WTO."

Malmstrom noted that there could be a surge of steel or aluminum imports into the EU following the implementation of the US's tariffs. As a result, the EU is "preparing to put in place our own safeguard measures," but does not wish to "encourage further closing of steel and aluminum markets."

In the final instance, the EU is "ready to act in a proportionate way according to WTO rules" and is discussing the possible imposition of measures "corresponding to the economic loss suffered" on a number of US products.