'Bad day for trade' as US slaps tariffs on EU steel, aluminium
Photo © Copyright ArcelorMittal
(BRUSSELS) - The United States announced Thursday that it will impose additional duties of 25 and 10 per cent respectively on imports of steel and aluminium from the European Union, starting on 1 June 2018.
The EU has hit back at the "unjustified" measures, which will affect EU exports which were worth EUR 6.4 billion in 2017. It says they are at odds with World Trade Organisation rules.
"This is protectionism, pure and simple," said European Commission president Jean-Claude Juncker: "Overcapacity remains at the heart of the problem and the EU is not the source of but on the contrary equally hurt by it." Mr Juncker said that at the heart of the problem was overcapacity, and EU was not the source and was on the on the contrary equally hurt by it.
The EU executive says that it had "continuously engaged with the US " at all possible levels to address the problem of steel overcapacity. Trade Commissioner Cecilia Malmstroem said: "Today is a bad day for world trade....Throughout these talks, the US has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU. This is not the way we do business, and certainly not between longstanding partners, friends and allies. Now that we have clarity, the EU's response will be proportionate and in accordance with WTO rules."
While concerned about the US move, the EU has not been caught unawares. The EU has been preparing over the last months and it says it stands now ready to 'react to the US trade restrictions on steel and aluminium in a swift, firm, proportionate and fully WTO-compatible manner'.
The EU is ready to launch legal proceedings against the US in the WTO on 1 June. It says the US measures are primarily intended to protect the US domestic industry from import competition, 'clearly at odds with WTO rules'.
In addition to the WTO dispute settlement it is launching against the US, the EU also announced it has 'coordinated action in this field with other affected partners'.
As regards the US tariff measures, the EU will use the possibility under WTO rules to 'rebalance' the situation by targeting a list of US products with additional duties. It says the level of tariffs to be applied will 'reflect the damage caused by the new US trade restrictions on EU products'.
The list of US products was consulted with European stakeholders and supported by EU Member States. The EU notified its potential rebalancing to the WTO on 18 May and, in line with the Organisation rules, could trigger them 30 days later. The Commission says it will now in coordination with Member States take a formal decision to proceed with the 'rebalancing'.
The Commission says it has a duty to shield the EU steel and aluminium markets from damage caused by additional imports that might be coming into the EU as a result of the closure of the US market. Its investigation towards possible imposition of safeguard measures on steel was launched on 26 March. The Commission has nine months to decide whether safeguard measures would be necessary.
It says this decision could also be taken much earlier in the proceedings, if the investigation confirms the necessity for swift action. The Commission has also put in place a surveillance system for imports of aluminium to be prepared in case action will be required in that sector.
List of products for rebalancing