EU says it will retaliate for US steel, aluminum tariffs

The European Union on Thursday said they will take retaliatory action against the United States in response to the Trump administration’s decision to issue hefty steel and aluminum tariffs.

The EU and the United States failed to reach an agreement on an exemption from the duties despite having spent the better part of the past two months trying to hammer out a deal that would provide a waiver from the tariffs of 25 percent on steel imports and 10 percent on aluminum imports announced by President Trump in March.


EU Commissioner for Trade Cecilia Malmström said of the tariffs that ”today is a bad day for world trade.”

“We did everything to avoid this outcome,” said Malmström, who had repeatedly met with Trump administration officials in Washington in the last couple of months, hoping to reach an exemption agreement.

Commerce Secretary Wilbur Ross said Thursday that despite those discussions the United States would slap the tariffs on the EU, Mexico and Canada, which combined account for about 50 percent of all steel and aluminum imported into the U.S.

The policy goes into effect on Friday.

The EU said it will file a case against the United States at the World Trade Organization (WTO) and take retaliatory action, most likely in the form of reciprocal tariffs. 

Jean-Claude Juncker, president of the European Commission, said, “The U.S. leaves us no choice but to proceed with a WTO dispute settlement case and the imposition of additional duties on a number of U.S. imports.”

“We will defend the EU’s interests, in full compliance with international trade law,” he added.

Besides a WTO case, Malmström said the EU will impose “rebalancing measures and take any necessary steps to protect the EU market from trade diversion caused by these U.S. restrictions.” 

Malmström said that during her talks with Ross, she “argued for the EU and the U.S. to engage in a positive transatlantic trade agenda, and for the EU to be fully, permanently and unconditionally exempted from these tariffs.”

The EU officials said they wouldn’t bow to the threat of trade restrictions and concede to the United States.

“This is not the way we do business, and certainly not between longstanding partners, friends and allies,” Malmström said.

“Now that we have clarity, the EU’s response will be proportionate and in accordance with WTO rules,” she said. 

Juncker said the EU “believes these unilateral U.S. tariffs are unjustified and at odds with World Trade Organization rules.”

“This is protectionism, pure and simple. Over the past months we have continuously engaged with the U.S. at all possible levels to jointly address the problem of overcapacity in the steel sector.”

The EU is expected to quickly retaliate with promised tariffs of about $3.3 billion on iconic American products such as bourbon, jeans and motorcycles. 

Ross brushed off the EU’s threats of retaliation, telling CNBC it’s a very small percentage of the entire U.S. economy.

Trump is using Section 232 of a trade law that allows tariffs to be imposed on products that the United States deems a threat to national security to justify the move.

EU officials said the goal between the longtime trading partners should be focusing on global overcapacity of the steel and aluminum markets. 

“Overcapacity remains at the heart of the problem and the EU is not the source of but on the contrary equally hurt by it,” Juncker said.

“By targeting those who are not responsible for overcapacities, the U.S. is playing into the hands of those who are responsible for the problem.”

Last year, nearly 50 percent of U.S steel and aluminum imports came from the EU, Canada and Mexico.

Tags Aluminum Donald Trump European Union Protectionism Steel Tariff Trump tariffs Wilbur Ross World Trade Organization

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