Steel tariffs: EU and US hold talks as deadline looms

The EU’s top trade official Cecilia Malmstrom spoke with her US opposite number ahead of a deadline that could see tariffs imposed on EU metal exports. Brussels could impose levies of its own on some US products.

European Union Trade Commissioner Cecilia Malmstrom spoke to US Secretary of Commerce Wilbur Ross by phone on Monday, to discuss whether Europe will remain exempt from tariffs on metals being imported to the US.

The conversation took place ahead of the expiry of a waiver, at midnight US Eastern Standard Time (0400 UTC), that temporarily exempted the EU from aluminum and steel tariffs imposed by US President Donald Trump.

Talks to avoid tariff tit-for-tat

  • The US imposed tariffs of 25 percent on steel imports and 10 percent on aluminum in March, but gave temporary tariff waivers to the EU, Australia, Argentina, Brazil, Canada, Mexico and South Korea.
  • US Commerce Secretary Wilbur Ross has said that only some countries that were given waivers would receive extensions to tariff relief.
  • The European Commission has said talks are under way with the US "at all levels" to avoid a tit-for-tat escalation, with Malmstrom and Ross spoke by phone on Monday.
  • Ross is said to have previously requested that the EU voluntarily limit its exports of steel and aluminum to 90 percent of the average 2016/2017 level.

Read more: German economy minister says he found 'open ears' in US on tariffs

Heated Trump tariff dispute reaches tipping point

A presidential proclamation

Flanked by steel workers, US President Donald Trump signed a presidential proclamation on global metal tariffs in March, claiming that subsidized imports were damaging domestic producers. The measures were targeted primarily at overproduction by China but, in a tweet, Trump also described the European Union as "wonderful countries who treat the US very badly on trade."

Heated Trump tariff dispute reaches tipping point

Glut on the market

Heavy tariffs had been recommended on China, Russia and other countries by the US Commerce Department. It said that normal methods used to prevent dumping of products at low prices onto US markets had failed. Although China was singled out as particularly responsible for causing the glut in steel and aluminum, the recommendation was that other countries should also take a hit.

Heated Trump tariff dispute reaches tipping point

Escalating dispute

China said it would respond to the US plans to impose tariff by adding a 25 percent tariff on products from the US — including pork, wine, apples and ginseng. Washington hit back with a list of technological targets to be slapped with new duties, with Beijing then imposing duties on soybeans — a product for which China is US producers' main market.

Heated Trump tariff dispute reaches tipping point

South Korea makes concessions

Among the countries hit by the tariffs was South Korea, which agreed to cut steel exports to the US by 30 percent and accept extended tariffs on South Korea pickup trucks by the US. Seoul also said it would open up its car market more widely to the US, its second-largest trading partner. The Trump administration had instigated talks last year to renegotiate its KORUS trade deal with the US.

Heated Trump tariff dispute reaches tipping point

Europe on one page

The leaders of France, Britain and Germany said they would be ready to retaliate if the EU were not permanently exempted from the tariffs. According to the office of French President Emmanuel Macron, he had discussed the tariffs with Chancellor Angela Merkel and Prime Minister Theresa May. The three hoped the US wouldn't take measures "contrary to transatlantic interests," a spokesperson said.

Heated Trump tariff dispute reaches tipping point

Icons of America

Before the US introduced its temporary waiver on the tariffs for the EU, Brussels had threatened Washington with raising duties on some particularly iconic American goods. They included US bourbon, peanut butter, Harley Davidson motorcycles and blue jeans.

Heated Trump tariff dispute reaches tipping point

North American neighbors

It's expected that Canada and Mexico could receive longer tariff exemptions. That's because negotiations over the levies have become intertwined with talks about the North American Free Trade Agreement (NAFTA).

What's being said

"The only thing that I can tell you today is that we are patient, but we are also prepared," European Commission Spokesman Margaritis Schinas said.

US Treasury Secretary Steven Mnuchin has said President Trump has not yet made a decision on whether any countries should receive extended exemptions. "The president has not made any decision yet," Mnuchin told Fox Business Network.

German Economy Minister Peter Altmaier on Monday said the EU should present a specific offer to the US, and should continue talking even if trade tariffs were imposed. "I believe we must continue to negotiate whatever happens," he said, adding that the aim of the negotiations should be to reduce tariffs in general.

Read more: Germany, the US and non-free trade

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DW News | 27.04.2018

Merkel doesn't tip hand on Trump decision on steel, alumin...

What could Europe do? Europe has earmarked certain American imports — iconic items such as Harley-Davidson motorbikes, blue jeans and bourbon whiskey — for retaliatory levies. The EU's three largest economies — Germany, Britain and France — held crisis talks on Sunday. Afterwards, the French presidency said they had agreed "the EU must be ready to act, if necessary, with efficiency and speed," if Washington were to press ahead with the tariffs.

Changes to free trade deals: South Korea has had the waiver extended after agreeing to revisions of its free trade agreement with the US. Canada and Mexico could see an extension to their waiver, if the Trump administration deems that enough progress has been made with the US on the North American Free Trade Agreement (NAFTA), which Trump claims is unfair to the US.

rc/rt (AFP, AP)