On Tuesday 1 May, the European Commission took note of the prolongation for a month of the exemption for the EU from the US customs duties of 25% on imports of steel and of 10% on imports of aluminium. The Commission nevertheless deplored the uncertainty surrounding this decision for businesses and again demanded permanent and unconditional exemption.
A few hours before the expiry of the provisional exemptions granted to several countries when these customs duties were enacted on 23 March, US President Donald Trump decided, on Monday 30 April, to prolong by a month the exemption from the customs duties on steel and aluminium granted to the countries of the EU, Canada and Mexico in order to continue discussions with these countries.
Trump stated that agreements had been reached for permanent exemptions with South Korea, Argentina, Australia and Brazil.
"The US decision prolongs market uncertainty, which is already affecting business decisions. The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security", the European Commission commented on Wednesday.
"Overcapacity in the steel and aluminium sectors does not originate in the EU. On the contrary, the EU has over the past months engaged at all possible levels with the US and other partners to find a solution to this issue", the Commission continued.
"The EU has also consistently indicated its willingness to discuss current market access issues of interest to both sides, but has also made clear that, as a longstanding partner and friend of the US, we (the EU) will not negotiate under threat. Any future transatlantic work programme has to be balanced and mutually beneficial", the Commission concluded.
"We reiterate our call to make this exemption unconditional and permanent. The US measures cannot be justified from considerations of security and public order. This has no place between allies. We want these measures to be dropped. We refuse to negotiate under threat", European Commission President Jean-Claude Juncker told the European Parliament on Wednesday.
European Commissioner for Trade Cecilia Malmström remains in contact with US Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer.
On Tuesday, Ross spoke of discussions that are potentially fruitful for reducing transatlantic trade tension overall. He added that he did not think the US intended to offer very long term prolongations as this would run counter to the objective sought.
On Wednesday, the Commission reiterated that it had prepared a package of counter-measures to the imposition of US taxes targeting European steel and aluminium. These counter-measures include customs duties on US exports for a value of €2.8 billion ($3.4 billion) (see EUROPE 11983).
In order to settle the issue, Malmström and Ross opened a dialogue process on 21 March regarding the transatlantic trade disputes – with the possible constitution of a working group – which has not yet resulted in anything concrete (see EUROPE 11986, 11988).
In the corridors, however, the Commission and member states are talking about the discussions to be planned with the US administration, once the definitive exemption has been confirmed, on the lowering of customs barriers on certain products and other regulation issues.
In response to Trump's demands on better access to the EU market for US cars, Malmström provided a long list, in March, of EU trade grievances targeting the US, concerning US restrictions to public procurement access (see EUROPE 11990).
The negotiations for an EU-US free trade agreement (TTIP) that were started in March 2013 have been at a standstill since the departure of Trump's predecessor at the White House, Barack Obama.
During the European Council on 23 March, several European leaders said they did not want talks with the US for a 'TTIP Lite' that would just include the treatment of tariff barriers (see EUROPE 11989).
BusinessEurope, the association of European businesses, has said the new reprieve offered by Washington is "positive", but the association deplores the lack of predictability for business. (Original version in French by Emmanuel Hagry)