The United States is set to announce plans to slap tariffs on EU steel and aluminum imports as early as today.
U.S. and European officials held last-ditch talks in Paris to try to reach a deal, though hopes are low and fears of a trade war are mounting.
President Donald Trump announced in March that the United States would slap a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, citing national security interests.
But he granted an exemption to the EU and other U.S. allies and that reprieve expires on Friday. Two sources briefed on the matter said the decision would land before that deadline.
‘World trade is not a gunfight at the O.K. Corral,’ French Economy Minister Bruno Le Maire said Thursday, warning that the EU would take ‘all necessary measures’, in the event of tariffs.
President Donald Trump announced in March that the United States would slap a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, citing national security
Commerce Secretary Wilbur Ross told French daily Le Figaro it would be announced either before markets opened or after they closed.
While not confirming directly that the U.S. would decide to impose tariffs, he said: ‘It’s up to the European Union to decide if it wants to take retaliatory measures.
‘The next question would be: how will the President react? You saw his reaction when China decided to retaliate.
‘If there is an escalation it will be because the EU would have decided to retaliate.’
French Finance Minister Bruno Le Maire, whom Ross was scheduled to meet in Paris on Thursday morning, said on Wednesday that the EU did not want a trade war either but would respond if Washington imposed tariffs.
Le Maire, who met Thursday in Paris with US Commerce Secretary Wilbur Ross, compared the transatlantic trade battle that would be unleashed by such a decision to a showdown described in the 1957 western ‘Gunfight at the O.K. Corral’.
‘It’s not everyone attacking the other and we see who remains standing at the end,’ he said, declaring that stiff taxes on imports from Europe, the single-largest source of US steel imports, would be ‘unjustified, unjustifiable and dangerous’.ݮ
He said: ‘This will only lead to the victory of those who want less growth, those who don’t think we can develop our economies across the world.’
‘We think on the contrary that global trade must have rules in a context of multilateralism. We are ready to rebuild this multilateralism with our American friends.’
‘Tariffs on steel and aluminum imports to the U.S. can help local producers of the metals by making foreign products more expensive.
The European Commission has said the EU should be permanently exempted from the tariffs (pictured: Commission president Jean-Claude Juncker)
‘But they can also increase costs more broadly for U.S. manufacturers who cannot source all their needs locally and have to import the materials. That hurts the companies and can lead to more expensive consumer prices, economists say.
‘Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade. Nothing.’
The European Commission, which coordinates trade policy for the 28 EU members, has said the bloc should be permanently exempted from the tariffs since it was not the cause of overcapacity in steel and aluminum.
The Commission has said the EU will set duties $3.4 billion of U.S. exports, including peanut butter and denim jeans, if its metals exports to the United States worth $7.5 billion are subject to tariffs.