EU Commission outlines countermeasures if Trump triggers “trade war”

EPA-EFE/OLIVIER HOSLET

European Commissioner for Trade Cecilia Malmstrom gives a press conference in Brussels, Belgium, 07 March 2018.

EU Commission outlines countermeasures if Trump triggers “trade war”


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The European Commission on Wednesday adopted a proposal for a list of US products that will be subject to increased tariffs if US President Donald J. Trump follows through with his threat to slap harsh tariffs on steel and aluminium from the EU, said the European Commissioner for Trade Cecilia Malmström.

As the “events in the US are moving quickly,” the Commissioners assessed the situation during Wednesday’s College meeting with Malmström suggesting that “there are indications that Trump may, in the coming days, sign-off on increased import tariffs – 25% on steel and 10% on aluminium.”

Trump’s sudden decision to slap punishing taxes on European steel producers was made under an obscure law known as “Section 232”, which refers to internal or national security threats. The EU and Trump’s own top advisors have unsuccessfully tried to convince him that no threats to the US’ national security interests exist because of steel and aluminium imports from fellow allies and NATO members in Europe.

The move has drawn widespread criticism from Trump’s inner circle, with former staunch supporter Gary Cohn tendering his resignation after he was unable to convince Trump that declaring a trade war on Europe would be devasting to the US’ manufacturing sector. The protectionist nature of Trump’s appears to have been the brainchild of the isolationist and nationalist hardliners in his White House, including his 32-year-old far-right senior adviser Stephen Miller and the Director of Trade and Industrial Policy Peter Navarro – both known for subscribing to widely debunked conspiracy theories as well as their support for hawkish protectionism and hostility towards the EU.

Malmström outlined the bloc’s response to the proposed metals tariffs is a provisional list of US products that could amount to € 2.83 billion, according to media reports. She suggested that the list will be given to the Member States, then later published so the European Commission can receive feedback before putting the measures into place.

“Certain types of bourbon are indeed on the list as are other items, such as peanut butter and cranberries, orange juice, etc…they will be part of the list.”

In Malmström’s eyes, the motivation of the U.S. is meant as “economic protectionism disguised as a national security measure,” adding that she doubted whether the move complies with the World Trade Organization’s (WTO) regulation.

“The EU would be entitled to make use of a WTO safeguard agreement to rebalance benefits that we have given to the US in the past,” she added, saying that the Commission is in the process of looking into the WTO’s regulations on how to respond in the event Trump finalises his decision on the new tariffs.

The Commission understands and agrees with the US that the root cause of the problem is overcapacity and that the production often takes place under “non-market conditions”. Malmström, however, opposes Trump’s move to punish reliable allies and trade partners, saying “protectionism cannot be the answer, it never is.”

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