EU warns Trump on trade

Jonathan Stearns

EU leaders vowed an unwavering response to US President Donald Trump’s protectionism, signalling a readiness to retaliate should the US escalate a trade war with tariffs on cars.

The EU government heads repeated criticism of US duties on foreign metals and expressed support for the bloc’s retaliatory action over those levies, which Mr Trump has justified on US national-security grounds.

The EU reacted last week by imposing tit-for-tat tariffs on €2.8bn of imports of US goods ranging from motorcycles to orange juice.

The US duties of 25% on steel and 10% on aluminium “cannot be justified on the grounds of national security,” the 28 leaders said at their meeting in Brussels.

“The EU must respond to all actions of a clear protectionist nature,” they said.

The global commercial order is being shaken by the Trump administration’s use of an obscure US trade-law provision on national security to justify the metal tariffs against a host of countries including defence allies.

The EU has also complained to the World Trade Organisation, calling the duties pure protectionism masquerading as national-security policy.

Mr Trump is threatening to deploy the same argument to impose US tariffs on cars and auto parts within months, a step that would hit the EU in general and Germany in particular much harder than have the metal levies.

Jean-Claude Juncker, president of the European Commission, said he has the impression “sometimes” that the US government wants to divide the bloc along national lines and stressed the need for unity in Europe.

“When it comes to Europe, we have to show that we do exist, that we are united,” he told reporters after the summit.

Europe continues to stand for free trade and fair trade.

Mr Juncker, who is due to visit Mr Trump in Washington in late July, said he would “present the European point of view” there and “I’m not sure that we will find an agreement between the US and the EU, but we’ll try.” The value of EU automotive exports to the US is 10 times greater than that of the bloc’s steel and aluminium exports combined.

That means any European retaliation over car tariffs introduced by Mr Trump would likely target a bigger sum of American goods exported to Europe than the amount hit by last week’s European measures.

Bloomberg


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