The US government has delayed the implementation of steel and aluminium tariffs for the EU, Canada and Mexico on the day they were to enter into force.
Negotiations between the EU and the US over the steel and aluminium tariffs will now continue for an additional 30 days, as both sides seek a compromise. The US has already reached deals in principle with Argentina, Brazil and Australia, but previous negotiations with Europe fell apart when the EU refused to voluntarily limit steel exports to 90% of their 2016-17 average.
The tariffs – 25% on steel imports and 10% on aluminium – were brought in for what the US administration called ‘national security’ reasons, and it is thought that the new levies are mainly intended to limit imports from China, which is one of the largest exporters of steel in the world and with which the US had a $336bn (~€279.6bn) trade deficit last year.
How will negotiations proceed?
In a statement following the announcement that the EU would be exempt from the steel and aluminium tariffs until 1 June, the European Commission insisted that it should be permanently exempt from the import duties, and called the US plan unjustified.
The statement reads: ‘The US decision prolongs market uncertainty, which is already affecting business decisions. The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.’
European Commissioner for Trade Cecilia Malmström has been meeting with US Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer, and will continue to do so in an attempt to secure the EU a permanent exemption from all steel and aluminium tariffs in the US.
The EU’s statement indicated that it was willing to negotiate, but that the outcomes of these negotiations must be ‘balanced and mutually beneficial’. Otherwise, Europe has warned that it is ready to retaliate with tariffs of its own on US exports.
The statement explains: “The EU has also consistently indicated its willingness to discuss current market access issues of interest to both sides, but has also made clear that, as a longstanding partner and friend of the US, we will not negotiate under threat.”
