On Friday 9 March, European Trade Commissioner Cecilia Malmström insisted the EU wants to know clearly whether it is exempted from the customs duties enacted on Thursday 8 March by US President Donald Trump on imports of aluminium and steel into the USA. She gave assurances that "dialogue remains the first option" rather than initiating a package of European counter-measures.
"We hope to have the confirmation that the EU is excluded" from the US taxes, Malmström told the US think tank the German Marshall Fund in Brussels on Friday.
"We are friends. We are allies. We work together. We cannot be a threat to US national security, so we are counting on being excluded" from the taxes, she insisted, warning that if the problem was not resolved bilaterally or through the WTO, the EU would protect its industry through "rebalancing measures".
Trump enacted the establishment of customs duties of 25% on imports of steel and of 10% on those of aluminium in Washington on Thursday. The duties were enacted for reasons of national security under Section 232 of the Trade Expansion Act (see EUROPE 11973).
Canada and Mexico will be temporarily exempted from the measures if they agree to renegotiate the North American Free Trade Agreement (NAFTA) in a direction that is pleasing to Washington. Countries that convince the US administration that their exports of steel and aluminium do not threaten US industry could also be exempted from Trump's newly enacted customs duties.
"What President Trump has said is not very clear so we will try to obtain more clarity", Malmström stated. She will meet US Trade Representative Robert Lighthizer at a tripartite meeting with Japan's Economy Minister Hiroshige Sekō in Brussels on Saturday 10 March. This meeting is being held as part of the three-way discussions on industrial overcapacity that were committed to on the sidelines of the WTO ministerial conference in Buenos Aires in December 2017 (see EUROPE 11924).
Malmström will also warn her US counterpart of the actions being considered by the EU in response to the possible US taxes. These EU actions include "rebalancing measures" (a hushed way of saying retaliation measures) which could be adopted within 90 days under WTO rules.
These measures would take the form of customs duties on US products – for a third of steel products, a third of agricultural products (such as peanut butter, cranberries and orange juice, Malmström said on Wednesday) and third of other products – worth around €2.8 billion, the equivalent of the share of the European steel and aluminium market affected by the US restrictions (see EUROPE 11976).
"We are not preparing a battle. The EU is a peaceful project", Malmström nevertheless stated on Friday, reiterating that the EU shared the concerns of the USA about the problem of global overcapacity in the steel sector, but saying that the "unilateral" establishment of customs duties was not the solution.
Criticising the customs duties promised by Trump as a "protectionist measure" that could undermine the multilateral trading system, European Commission Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen repeated on Friday that the EU was committed to free trade but also to " harnessing globalisation" through a system of global rules that are in place but that are in need of being perfected.
"We have to choose whether we want rules-based trade (...) or whether we want the rule of force, the rule of the strongest, which we have now seen", Katainen said. (Original version in French by Emmanuel Hagry)