The European Commission has responded to a new US tax overhaul which will impose import duties on EU exports of steel and aluminium.
Yesterday (1 March), US president Donald Trump announced a hike in import duties on EU exports of steel and aluminium, which will rise to 10% for aluminium and 25% for steel. The plan is intended to protect US domestic steel and aluminium production from competition from imports, and Trump has said that the measures are in the interest of national security.
However, the EU has called the justification for a hike on import duties on the grounds of national security ‘very weak’, with commission officials saying that the bloc stands ready to respond to what it views as unfair trade tariffs. Commission President Jean-Claude Juncker has promised a new proposal in the coming days which will “rebalance the situation”.
What has the European Commission said?
Juncker described the move as a “blatant intervention to protect US domestic industry” and warned that protectionism does not provide a solution to the common problems facing the steel sector. He also insisted that the imposition of new import duties on EU exports could not be justified on national security grounds.
He also warned that the EU was ready to respond: “The EU has been a close security ally of the US for decades. We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk. I had the occasion to say that the EU would react adequately and that’s what we will do. The EU will react firmly and commensurately to defend our interests.”
Commissioner for Trade Cecilia Malmström cautioned that the US’ decision would not only damage trade, but also on transatlantic relations, and also that the increased costs would likely be borne by US consumers.
She said: “The root cause of problems in [aluminium and steel] is global overcapacity caused by non-market based production. This can only be addressed at the source and by working with the key countries involved. This go-it-alone action by the US will not help.”
