Ahead of a debate at the European Commission on the EU's response, Commission Vice-President Frans Timmermans announced on Tuesday 6 March that the EU is ready to protect its industry "with strength, speed and within the rules of the WTO" in the face of the customs duties that US President Donald Trump is due to enact on 8 March on imports of steel and aluminium to the USA. The EU's response could include retaliation measures that would hit €2.8 billion of US goods.
"Protectionism costs everyone very dearly, but if a country introduces protectionist measures, the EU will protect its industry. It is our duty and we will do it with strength, speed and within the rules of the WTO", Timmermans warned on French radio station Europe 1, calling for "the utmost to be done to avoid this trade war".
"Do not do this because it will be damaging to everyone, but if you do it, we will respond proportionately. The first losers will be the Americans, but when a trade war starts, there are losers everywhere", he warned.
Following the investigation that Trump requested in April 2017 and which, under the 1962 Trade Expansion Act, would give his administration full powers in the face of Congress to restrict imports that would endanger the country's security, Trump said he would enact customs duties of 25% on Thursday on imports of steel, and of 10% on imports of aluminium. He did not, however, specify which countries the duties will target (see EUROPE 11973).
The Commission has been working for a long time on three possible actions: consultations at the WTO with the USA and in cooperation with the countries affected by the US measures; retaliation measures compatible with WTO rules; safeguard measures if the steel products from third countries destined to be exported to the USA are re-directed to the EU.
As regards the retaliation measures, the Commission is considering duties of 25% to be set up on US products – for a third of steel products, a third of agricultural products and third of other products – in the amount of €2.8 billion ($3.5 billion), the equivalent of the share of the European steel and aluminium market affected by the US restrictions.
The retaliation measures being considered would thus target US exports to the EU: steel and other industrial products worth €854 million; orange juice, Bourbon whisky, corn and other agricultural products worth €951 million; shirts, jeans, cosmetics and other consumer goods such as motor bikes and pleasure boats worth €1 billion.
Following Trump's announcement, European Commission President Jean-Claude Juncker said the list would include "Bourbon whisky, Harley Davidson motor bikes and Levi's jeans".
The EU is thus targeting very popular brands and products manufactured in states in which voters most favour Trump – like Kentucky, where Bourbon whisky is produced, Wisconsin where Harley-Davidson is based, and Florida which produces orange juice. (Original version in French by Emmanuel Hagry)