14 03 2018

EU 'Ready To React' To US Tariffs

The EU hopes to convince the US that introducing tariffs on steel and aluminium imports is "not the right move," but is ready to act should any such measures be implemented.

On March 1, Donald Trump said that the US will "be instituting tariffs" of 25 percent on steel imports and 10 percent on aluminium imports. The proposed action follows investigations between April 2017 and January 2018 by the US Department of Commerce. These investigations concluded that steel and aluminium imports threatened US national security and recommended the imposition of trade restrictions.

The EU's College of Commissioners met on March 7 to discuss the EU's response. Trade Commissioner Cecilia Malmstrom said afterwards that as no decision has yet been made by the US regarding Trump's proposals, no formal action has been taken by the EU.

Malmstrom said that the Commissioners hope that as the EU is a US security partner it will be excluded. The EU also hopes "to convince the US administration that this is the right move."

The Commission has made clear that it "stands ready to react proportionately and fully in line with the World Trade Organization rules in case the US measures are formalized and affect [the] EU's economic interests."

Malmstrom warned that any such tariffs would "put thousands of European jobs in jeopardy" and would have to be "met by [a] firm and proportionate response."

According to Malmstrom, overcapacity is the root cause of problems in the sector, driven by "the fact that a lot of steel and aluminium production takes place under massive state subsidies, and under non-market conditions." She stressed that the only way to address these issues is "by cooperation, getting to the source of the problem, and working together."

"What is clear is that turning inward is not the answer. Protectionism cannot be the answer, it never is."