Right after the announcement by US Commerce Secretary Wilbur Ross of the application to European products, from 1 June, of US customs duties of 25% on imports of steel and of 10% on imports of aluminium, the European Commission promised, on Thursday 31 May, to retaliate by implementing its 're-balancing' counter measures and by taking the issue to the WTO on 1 June.
"The EU believes these unilateral US tariffs are unjustified and at odds with World Trade Organisation rules. This is protectionism, pure and simple", European Commission President Jean-Claude Juncker stated, reaffirming that Europe was "not the source" of global overcapacity in the two sectors targeted, but that it was "equally hurt by it" and was "determined to work towards structural solutions together with our partners".
"By targeting those who are not responsible for over capacities, the US is playing into the hands of those who are responsible for the problem. The US now leaves us with no choice but to proceed with a WTO dispute settlement case and with the imposition of additional duties on a number of imports from the US. We will defend the Union's interests, in full compliance with international trade law", Juncker added.
"The EU's response will be proportionate and in accordance with WTO rules", European Trade Commissioner Cecilia Malmström stated, referring to the package of counter measures providing for re-balancing measures and 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 agricultural, industrial and steel products on which, from 1 June, the EU would impose customs duties of 25%, which could climb to 50% from 23 March 2021.
Malmström also promised safeguard measures to protect the EU market from the trade deflection caused by these US restrictions. On 26 March, the Commission opened an investigation able to lead to the adoption of safeguard measures on steel, and it set up a monitoring system for aluminium imports.
Juncker and Malmström deplored the US administration's rejection of the four-point plan agreed by the European leaders on 17 May to improve the transatlantic trade environment, including tariff talks on industrial products such as cars, the liberalisation of public procurement, and also regulatory cooperation for certain sectors and increased cooperation on energy and LNG (see EUROPE 12022), but conditional upon a permanent exemption for the EU from the US taxes on steel and aluminium.
"The EU is ready to discuss how to improve bilateral trade relations, but not to negotiate under threat", Juncker reiterated.
"Over the last couple of months, I have spoken on numerous occasions with the US Secretary of Commerce (Ross). I have argued for the EU and the US to engage in a positive transatlantic trade agenda, and for the EU to be fully, permanently and unconditionally exempted from these tariffs. Throughout these talks, the US has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU. This is not the way we do business, and certainly not between long standing partners, friends and allies", Malmström regretted.
The EU benefited from a provisional exemption from the US customs duties announced by US President Donald Trump in March, but Ross deemed that the talks with the EU had not progressed sufficiently since then to justify prolonging the exemption beyond 1 June.
"If there is an escalation it will be because the EU will have decided to retaliate", Ross warned in an interview published in French daily newspaper Le Figaro on Thursday.
Speaking at the OECD ministerial meeting in Paris on Wednesday 30 May, Ross had asked the EU to follow the example of China and to start talks without taking account of the disputes on the steel and aluminium customs duties.
"China pays customs duties and does not use them as an excuse. It is only the EU that tells us we can't negotiate", Ross said, stating that the taxes enacted in March under national security had "already created jobs thanks to new projects or to the re-opening of installations". "It's true. It's a fact", he insisted.
France and Germany united behind Commission
Deploring Washington's unilateral decision, France's Foreign Affairs Minister Jean-Yves Le Drian and Economy and Finance Minister Bruno Le Maire, and Germany's Economy Minister Peter Altmaier said they "share the Commission's reaction".
"As announced by the European Commission, we will take all appropriate measures and respond accordingly. France and Germany will continue their close and trusted cooperation on this matter", they added.
Tajani assures European Parliament ready to play its role
"I am very disappointed with the US decision to impose duties on steel and aluminium imports from Europe. These are unilateral and unjustified measures that will do serious harm to workers, industry and consumers on both sides of the Atlantic", Tajani stated.
“The European Union is ready to defend the interests of its citizens with all the means at its disposal. The European Parliament will play a full role in defending legitimate European interests", Tajani added.
“European workers and companies in the (steel and aluminium) sector have a tradition of quality and excellence, and are at the forefront of research and innovation. We have a duty to safeguard this extraordinary human, economic and technological capital, and we will do so with determination", he continued.
“The history of international trade teaches us that protectionism is a negative sum game, that suits no one and only risks triggering trade wars that are harmful to everyone. The European Union plays by the rules. We will continue to promote open markets with all relevant partners on an equal footing, with high standards of worker protection, safety, consumer protection and intellectual property", he concluded.
Concern for automobile industry
Malmström and Japan's Economy Minister Hiroshige Seko said on Thursday that they feared the taxes being studied by the US administration against imported cars might cause "serious turmoil" in the global market, if applied. (Original version in French by Emmanuel Hagry)