Steel standoff: EU, Japan press ally US for tariff exemption

BRUSSELS — The European Union and Japan pressed U.S. President Donald Trump’s trade envoy Saturday to exempt them, as longtime U.S. allies, from upcoming steel tariffs that have sparked fears of a new trade war.

But they appeared to win no quick concessions.

EU Trade Commissioner Cecilia Malmstroem said after meetings in Brussels that she got “no immediate clarity on the exact US procedure for exemption,” and that new talks are planned next week.

The tariffs come into force in two weeks, and if the 28-nation EU cannot secure an exemption, it has threatened retaliatory tariffs on U.S. products like peanut butter and orange juice. Japan has warned of the dangers of tit-for-tat measures.

Malmstroem said in a statement that she had a “frank” discussion with U.S. Trade Representative Robert Lighthizer about the steel tariffs, insisting that “the European Union must be excluded” because it is a close U.S. ally.

The two also met with Japan’s Minister of Economy, Trade and Industry of Japan Hiroshige Seko, and all three pledged in a statement afterward to work together to fight dumping that hurts jobs and industries around the world.

Lighthizer didn’t comment publicly after the meetings. Trump tweeted that he spoke with Japanese Prime Minister Shinzo Abe, saying they are “discussing opening up Japan to much better trade with the U.S. Currently have a massive $100 Billion Trade Deficit. Not fair or sustainable. It will all work out!”

Trump is opening up one-on-one trade talks with countries on the new tariffs, to see if he can win concessions for the U.S.

Trump insisted in a phone call with French President Emmanuel Macron — a leading EU player staunchly opposed to the tariffs — that the “decision is necessary and appropriate to protect national security.” The White House said in a statement Saturday that “both presidents discussed alternative ways to address United States concerns,” without elaborating.

Trump later tweeted: “The European Union, wonderful countries who treat the U.S. very badly on trade, are complaining about the tariffs on Steel & Aluminum. If they drop their horrific barriers & tariffs on U.S. products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!”

Saturday’s meetings in Brussels had been previously planned but took on greater importance because of Trump’s announcement of a 25-per cent tariff on steel imports and 10 per cent on aluminum imports.

Key U.S. trading partners and businesses have warned the tariffs could backfire, provoking a trade war and hurting allies like the EU and Japan more than China, their main target.

Japan’s government has warned the measure could hurt its economic relations with the U.S. But ahead of Saturday’s talks, Seko also cautioned that “falling to exchanges of unilateral measures will not be in the interest of any country,” according to the Kyodo news agency. He was apparently referring to the EU threats of retaliation.

Trump said Canada and Mexico are exempt for now, and other countries could be spared if they can convince the administration that their steel and aluminum exports don’t threaten American jobs and industry.

The EU insists that it is committed to open, global trade. Malmstroem said the real problem is an oversupply of steel on global markets, and she rejected Trump’s assertion that the tariffs are needed to protect U.S. national security, especially when most EU countries are members of NATO.

The EU exported about 5.5 million tons of steel to the U.S. last year. The U.S. bought 5 per cent of Japan’s steel last year but just 1.1 per cent of China’s steel.

Foreign steel producers are not only concerned about losing access to the U.S. market but also that steel from other exporters will flood already saturated markets, threatening jobs elsewhere.

The EU has warned that it stands ready to slap “rebalancing” tariffs on about 2.8 billion euros ($3.4 billion) worth of U.S. steel, agricultural and other products, like peanut butter, cranberries and orange juice.

 

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