European Trade Commissioner Cecilia Malmström will visit Washington on Tuesday 20 and Wednesday 21 March to ascertain with US Secretary of Commerce Wilbur Ross that the European Union is exempt from the customs duties on imports of aluminium and steel into the US, which were enacted by US President Donald Trump on 8 March and which will be applied on 23 March.
"My message is that the EU should be excluded (from the US taxes) as a whole. And that we want to work with the US and other partners in the world to address the root cause of this issue, which is overcapacity in steel production. We have different tools to do that. We are willing to reinforce them and to look at others", Malmström said during a brief press conference in Brussels on Monday afternoon.
Her visit to Washington currently has "no definite agenda", Malmström herself stated.
The Commission wants to ensure the EU's exemption from the customs duties of 25% on imports of steel and of 10% on imports of aluminium into the US. These duties are motivated on the grounds of national security under Section 232 of the 1962 Trade Expansion Act (see EUROPE 11973).
During a phone call with Ross on 15 March, Malmström had "reiterated that the EU, as a close security ally of the US, expects to be fully excluded from these measures as a whole". She had also called for the problem of overcapacity in the steel and aluminium sectors to be addressed together.
In September 2016, the G20 countries, which include the EU and US, set up a global forum for discussion on overcapacity in the steel sector. The forum is steered by the OECD.
The 33 countries participating in this forum agreed, in November 2017, on a raft of political solutions to be implemented in 2018 and 2019 to stem global overproduction in steel while ensuring fair competition for trade in steel through the fight against artificial support and subsidies for steel production (see EUROPE 11917).
Whilst Trump has deliberately sparked controversy on transatlantic market access, which goes beyond the simple issue of steel (see EUROPE 11979), the EU "refuses to link the issue of US taxes on steel and aluminium to other issues concerning market access and transatlantic trade relations", according to a source close to the issue at the Commission.
Since the start of Trump's presidency, the Commission has repeatedly stated that the ball is in the US court as regards resuming the negotiations for an EU-US free trade agreement. These negotiations have been at at standstill since the departure of Trump's predecessor, Barack Obama, from the White House.
The Commission will this week propose taxing actors in the digital sector that are active in the EU, particularly several US internet giants (see other article).
Germany's Economy Minister Peter Altmaier, whose country is clearly in Trump's line of target due to its significant trade surplus with the US, is in Washington until Tuesday to hold discussions with the US administration.
"The EU is a customs union and acts collectively. Dividing Europe cannot be in the interest of the US government, and it will not manage to do this", Altmaier warned this weekend.
While awaiting US clarification on the EU's outcome on whether or not it is exempt from the US measures, the Commission is continuing its work on the package of possible counter-measures. These include an appeal at the WTO, safeguard measures and rebalancing measures, and they would take the form of customs duties of 25% – for a third of steel products, a third of agricultural products and a third of other products – for a total of €2.8 billion (the equivalent of the share of the European market for steel and aluminium affected by the US restrictions) (see EUROPE 11983). (Original version in French by Emmanuel Hagry)