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EU mulls response to US tariffs

The US is mulling import tariffs on steel and aluminium from the EU.

The EU in turn hopes for a permanent exemption from US tariffs on aluminium and steel.

For the EU, the need to find a unified stance goes beyond just tariffs. The United States has withdrawn from the Iran nuclear deal, posing a threat to European companies doing business there, and has blocked appointments to the World Trade Organization, undermining its ability to settle trade disputes.

Germany has urged its EU partners to show more flexibility. Germany is Europe’s biggest exporter to the United States.

However for Germany to find a common stance with France and formulate an offer to the United States was equally difficult.

The European Commission, which oversees trade policy for the 28 EU members, has insisted that the EU be granted a permanent exemption without conditions. It has also said it would respond to tariffs with its own duties on US products, including motor bikes and whisky.

A further issue is that the United States has agreed to permanent exemptions with countries such as Brazil and South Korea, but only by imposing import quotas instead of tariffs.

The EU view is that the first step would be an assessment of what both parties wish to negotiate, and then it would need EU members to approve a mandate.