EU takes Trump to WTO over steel tariffs and hits back with countermeasures on American goods

European trade chief accuses US of trying to extort 'concessions' with 'threat'

Jon Stone
Thursday 31 May 2018 16:33 BST
Wilbur Ross on trade tariffs: Even if the EU retaliates, it won't be as much as 1% on our economy

The European Union will impose countermeasure tariffs against US trade in response to Donald Trump’s tariffs on European steel and aluminium exports, Brussels has said.

The bloc’s trade chief accused the US of trying to extort trade concessions from Europe with the “threat” of tariffs, but warned Mr Trump: “This is not the way we do business.”

The bloc is also taking the US to the World Trade Organisation’s ‘trade court’ – officially known as the dispute resolution mechanism – to get Mr Trump’s policy declared illegal.

The president’s commerce secretary Wilbur Ross confirmed the 25 per cent steel tariffs and 10 per cent aluminium tariffs against a selection of US allies on Thursday afternoon, with the new charges set to take affect at midnight on Thursday. He had been negotiating with EU officials in Paris in last-ditch talks.

“We will have to see what’s their reaction,” he said. “We continue to be quite willing and indeed eager to have discussions with all those parties.”

European Commission president Jean-Claude Juncker said he was “concerned” by the move, adding: “This is protectionism, pure and simple.”

The bloc’s chief said the EU was now left with “no choice” but to impose “rebalancing” duties against US goods and to take the country to the World Trade Organisation.

This is not the way we do business.

Cecilia Malmström, EU trade commissioner

Mr Juncker said problems in the global steel market were affected by an oversupply of steel and that the EU was hurt by low commodity prices as much as the US.

“By targeting those who are not responsible for overcapacities, the US is playing into the hands of those who are responsible for the problem,” he said, in an apparent veiled reference to China.

EU trade commission Cecilia Malmström said: “Today is a bad day for world trade. We did everything to avoid this outcome.

“Over the last couple of months I have spoken at numerous occasions with the US Secretary of Commerce. 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. This is also what EU leaders have asked for.

“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 longstanding partners, friends and allies. Now that we have clarity, the EU’s response will be proportionate and in accordance with WTO rules.

“We will now trigger a dispute settlement case at the WTO, since these US measures clearly go against agreed international rules. We will also impose rebalancing measures and take any necessary steps to protect the EU market from trade diversion caused by these US restrictions.”

Legal proceedings against the US at the WTO will start on 1 June – Friday, Brussels says, with EU member states already having been consulted on Tuesday. Under WTO rules it will have to wait until mid-June to formally implement its “rebalancing” measures; regulations say it has nine months to use the countermeasures.

A 10-page list of products affected by the EU’s countermeasures has already been released by the bloc and approved by member states; US products affected include sweetcorn, cranberries, tobacco, makeup, clothing, and a long list of steel products. The charges, which are technically a suspension of tariff concessions, come to approximately €2.8 billion annually.

Mr Trump has previously accused the EU of behaving in an “unfair” manner against American imports. The EU has said it is willing to negotiate favourable terms for the US, but not while Mr Trump is threatening it with tariffs.

In addition to the steel tariffs, Mr Trump’s administration has also ruled out impose sanctions on European companies that trade with Iran, as part of the US’s unilateral withdrawal from the Iran nuclear deal.

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