The EU’s four-point strategy to try to resolve the transatlantic trade dispute may not be enough to convince the American President, Donald Trump, to grant the EU a permanent exemption to the American taxes on imports of steel and aluminium, the European Commissioner for Competition, Cecilia Malmström, hinted on Tuesday 22 May, stating that otherwise, she anticipated other restrictive measures.
The plan hit upon by the European leaders at their meeting in Sofia on 17 May, and subject to the strict condition that the EU is given a permanent exemption, beyond 1 June, from the American taxes of 25% on imports of steel and of 10% on imports of aluminium (see EUROPE 12022), is the result of “us offering a constructive agenda where we want to engage with the USA on our bilateral relations, but also broadly working on the multilateral and addressing the core issue, which is steel over-capacity”, Malmström stressed following the meeting of the trade ministers of the EU in Brussels, but added that they would not be able to negotiate under threats.
The plan is based on four proposals: - discussions on a reciprocal tariff reduction on certain industrial products (but not agricultural products) and the opening-up of public procurement; - discussions on voluntary cooperation on rule-making; - discussions ahead of the WTO reform to ensure fair rules and mutually acceptable solutions to break the current block, by the United States, on the appointment of new judges to the WTO appeals body; - a deepening of the transatlantic energy relationship, particularly in the field of liquefied natural gas (LNG).
“Discussions with the American Trade Secretary, Wilbur Ross, are continuing. Is this going to be enough, I am not sure, frankly. There have been signals from the USA that the exemption will not be prolonged. So either they will be imposed on us on 1 June, or they will take other sorts of limiting measures”, Malmström said.
The German minister for the economy, Peter Altmaier, argued that the EU must remain united against a critical situation, stressing that the position adopted in Sofia by the Twenty-Eight was “unanimous”. “We have an intense week ahead of us”, including a meeting of the OECD ministers in Paris on 30 May, where the matter will also be discussed with the Americans, Altmaier said.
So far, the United States have granted permanent exemptions to Australia, Argentina, Brazil and South Korea, but these are accompanied by import quotas.
On Monday, the Bulgarian minister for the economy and President-in-exercise of the Council, Emil Karanikolov, warned that the EU would implement its package of counter-measures against any imposition of American taxes and in line with WTO rules, for instance customs duty on American imports worth €2.8 billion (see EUROPE 11983).
On Friday 18 May, the Commission notified the WTO a list of 332 American agricultural, industrial and steel-industry products against which, should Trump decide not to spare the EU from the American taxes on steel and aluminium, the EU will levy customs duty of 25%, but which may rise to 50% from 23 May 2021. (Original version in French by Emmanuel Hagry)