Trade tensions between USA and the EU becomes tougher as the EU announced today new import duties on selected goods imported from The USA. The additional duties on the full list of the US products notified to the World Trade Organisation (WTO) is just a part of EU’s response to US tariffs on steel and aluminium products.
The Commission expects to conclude the relevant procedure in coordination with Member States before the end of June so that the new duties start applying in July.
On 7th March, the College of Commissioners decided that the Commission should continue engaging with the US on other trade-related processes. A trilateral meeting with the US and Japan took place on 31 May in Paris, during which progress was made to address some of the root causes of the current tensions in the trading system, including China’s trade distorting practices.
Commissioner for Trade Cecilia Malmström said: “This is a measured and proportionate response to the unilateral and illegal decision taken by the United States to impose tariffs on European steel and aluminium exports. What’s more, the EU’s reaction is fully in line with international trade law. We regret that the United States left us with no other option than to safeguard EU interests.”
The application of the rebalancing duties is fully in line with WTO rules, and corresponds to a list of products previously notified to the WTO.
The actions announced today by the EU Commission follow some others adopted months before by South Korea and China. And surelly other measues of this type will come from other governments. Trade war is served if Trump keeps on this kind of protectionist policies.
On May 14th, the Korean government filed a complaint with the World Trade Organization (WTO) over the U.S.’s safeguard tariffs on washing machines and solar panels.
Should Seoul win the case, it could take measures to reinstate tariffs on imported U.S. goods, amounting to USD 480 million annually.
Last April the PRC filed a World Trade Organization complaint against US PresidentDonald Trump’s duties rise on imported steel and aluminum.
China’s government issued a list of U.S. goods including pork, apples and steel pipes on March 23rd that it said might be targeted for retaliation if Trump fails to negotiate a settlement to the dispute over steel and aluminum charges.The list meant around $3Bn compensation of trade losses erived from Trump’s hike in duties on metals.
EU’s actions are fully legal under the WTO Safeguard Agreement
The WTO Safeguards Agreement allows for a rebalancing corresponding to the damage caused by the US measures with EU exports worth €6.4Bn (2017) being affected.
The EU will therefore exercise its rights immediately on US products valued at up to €2.8Bn of trade.
The remaining rebalancing on trade valued at €3.6Bn will take place at a later stage in three years’ time or after a positive finding in WTO dispute settlement if that should come sooner.
EU’s response, based on three actions
The imposition of rebalancing duties on a list of selected US products is part of the three-pronged response outlined by the European Commission, that includes the launch of legal proceedings against the US in the WTO (on 1st June) and the possible triggering of safeguard action to protect the European market from disruptions caused by the diversion of steel from the United States market. On this, an investigation was launched on 26th March and the Commission has nine months to decide whether safeguard measures would be necessary.
If the investigation confirms the necessity for swift action, such a decision could be taken by summer.
As regards aluminium, the Commission has put in place a surveillance system for imports of aluminium to be prepared in case action is required in that sector.
Image over the headline.- Cecilia Malmström (Member of the EC in charge of Trade and member of the EU Parliament from the Alliance of Liberals and Democrats for Europe -Sweden-). © EU Parliament
Related Eastwind links:
EU on Trump’s import duties on metals.- The temporary exemption not enough
EU, taking action against Trump’s duties on steel and aluminum imports
