US RISKS TRANS-ATLANTIC ALLIANCE WITH IMPORT DUTIES




Robert Harneis –TDO- (FRANCE) - The US has introduced new punitive tariffs on steel and aluminium imports from the EU, Canada and Mexico.

It is unlikely that this is the final US position bearing in mind President Trump preference for noisy bazaar style negotiations that catch voters’ attention and at the same time test the determination of negotiating partners to resist and push back.

US Trade Secretary Wilbur Ross said the new duties, 25 percent on steel and 10 percent on aluminium, were necessary due to reasons of national security, but added, “We continue to be quite willing and indeed eager to have further discussions with all of those parties.”

So, for national security reasons the new duties are “necessary” but the US is “willing” and “eager” for “further negotiations”. This would appear to be a contradiction.

European Commission President Jean-Claude Juncker criticized the tariffs as “protectionism, pure and simple,” adding, “The EU believes these unilateral US tariffs are unjustified and at odds with World Trade Organization rules… 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.”

European Commissioner for Trade Cecilia Malmström said the EU had done “everything to avoid this outcome,” and would now “impose rebalancing measures and take any necessary steps to protect the EU market from trade diversion caused by these US restrictions.” The European Commission already prepared a list of US exports worth €6.4bn to be hit by retaliatory tariffs. The Mexican Economy Ministry and Canadian Prime Minister Justin Trudeau also announced they would deploy retaliatory tariffs on US goods in return.

Trade Secretary Liam Fox called the US justification of the tariffs as national security measures “patently absurd” and said, “We absolutely do not rule out counter measures.” He warned, however, “It would be a great pity if we ended up in a tit-for-tat trade dispute with our closest allies.” Meanwhile, French Finance Minister Bruno Le Maire criticized the tariffs as “unjustified and dangerous,” adding, “Our US friends must know that if they were to take aggressive actions against Europe, Europe would not fail to react.” The German government in a press release called the new tariffs “illegal” and warned that they may “lead to a vicious cycle of escalation that in the end harms everyone.”

Elsewhere, President of the Federation of German Industry (BDI) Dieter Kempf warned that the tariffs “risk throwing back the transatlantic partnership by several decades,” adding that Trump’s “uncompromising behavior is short-sighted and self-defeating… [His] protectionism will not make the US steel and aluminium industries a jota more competitive.” This comes as German newspaper Wirtschaftswoche reports that Trump told French President Emmanuel Macron at a meeting in April that he wanted to drive German Mercedes cars off the US market. [Source Open Europe].