European Commissioner for Trade Cecilia Malmström is to meet US Commerce Secretary Wilbur Ross and US Foreign Trade Representative Robert Lightizer on the sidelines of the OECD ministerial meeting in Paris on Wednesday 30 and Thursday 31 May. Their meeting will come ahead of the expiry on 1 June of the provisional exemption, granted to the EU by US President Donald Trump, from the US customs duties on imports of steel and aluminium that were enacted in March.
Malmström is continuing her negotiations with the US administration to obtain a permanent exemption for the EU, beyond 1 June, from the US taxes of 25% on imports of steel and of 10% on imports of aluminium.
To try and settle the current transatlantic trade dispute, the European leaders agreed on a four-point plan on 17 May, proposing in particular to improve reciprocal market access for industrial goods, including cars, as well as the liberalisation of public procurement and increased cooperation on energy and LNG (see EUROPE 12022).
This plan is subject to the strict condition that the EU be permanently exempt from the US taxes on steel and aluminium. But Malmström nevertheless said on 22 May that she fears the EU's offer may not be enough to convince Trump (see EUROPE 12024).
"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 (the customs duties) will be imposed on us on 1 June, or they will take other sorts of limiting measures", Malmström said.
The US has currently granted permanent exemptions to Australia, Argentina, Brazil and South Korea, but along with import quotas.
If it is hit by the US taxes, the EU will implement its package of counter-measures to the possible imposition of US taxes. These counter-measures are compatible with the rules of the WTO and provide for customs duties on US exports up to €2.8 billion (see EUROPE 11983).
On 18 May, the Commission notified the WTO of a list of 332 US agricultural, industrial and iron products against which the EU would impose 25% customs duties from 20 June. These duties could climb to 50% from 23 March 2021.
Concern for automobile trade
At the end of the week, Malmström also said she was concerned by Trump's new threat to hit the imports of vehicles and their spare parts with customs duties.
On 23 May, Trump asked Ross to start an investigation, under Section 232 of the 1962 US Trade Expansion Act, into the imports of vehicles, including lorries and spare parts, in order to determine their impact on US national security (see EUROPE 12026).
Trilateral meeting with Japan on steel
On the sidelines of the OECD ministerial meeting in Paris, Malmström will also take part – with her US counterparts and Japan's Minister for the Economy Hiroshige Sekō – in a trilateral meeting on overcapacity in the steel sector.
Despite the US unilateral move on protectionism against steel and aluminium, the EU, the US and Japan took commitments at their previous trilateral meeting on 10 March to continue their work to deal with the issue of industrial overcapacity in sectors like steel, and the distortions behind this (see EUROPE 11979). (Original version in French by Emmanuel Hagry)