EU Trade Commissioner Cecilia Malmström told MEPs on Tuesday (29 May) that the EU would activate “immediate” rebalancing measures if US President Donald Trump decides to impose quotas on the EU’s steel and aluminium exports as an alternative to tariffs as of Friday (1 June).
Malmström comments marked a new low point in transatlantic relations, which have gone downhill after Trump became president in November 2016 and put forward his protectionist ‘America first’ agenda.
Speaking in a debate during the European Parliament’s plenary session in Strasbourg, Malmström said she expected some restrictions on the EU exports of these metals to the US from Friday.
“Realistically, if the US decides to refrain from applying duties, I expect them none the less to want to impose some sort of cap on EU exports,” she said.
She explained that it could be a ‘hard cap’, with volume limits to access the US market, or a ‘soft cap’, with duties imposed after a certain threshold.
“Our future course of action will depend on the nature and severity of the measures imposed on our exports by the US, and the injury to our industry,” the Swedish commissioner explained.
Malmström told the MEPs that if Trump decides to impose restrictive quotas, the Commission would prepare a new implementing regulation with “immediate” rebalancing measures on imports from the US.
The response would be based on the list of products already signalled by the executive to react to the potential US tariffs. But she said the level of these duties would be lower than in the case of rebalancing the controversial tariffs.
Europe prepared a list of US exports subject to a potential 25% tariff and amounting to around €2.8 billion, the equivalent of European steel and aluminium affected by the US tariffs of 25% and 10% on these metals, respectively.
Trump set this Friday as a deadline to find a solution to the trade dispute with the EU. Despite two extra times and intense talks between Malsmtröm and US Secretary of Commerce Wilbur Ross, Europe’s hopes of finding a solution are fading fast.
Malmström and Ross will meet again on Wednesday on the margins of the OECD’s ministerial meeting.
Member states have refused to negotiate “at gunpoint” about Trump’s demands, including market access for US products in Europe.
The US President wants to cut the US trade deficit of €120 billion with the European economy.
Malmström recalled in the Parliament the EU’s offer to improve trade relations with Washington, but only if the bloc obtains “full, permanent and unconditional exemption from the tariffs”.
Following the Commission’s recommendation, EU leaders offered a deeper energy relationship by accepting more liquefied natural gas imports from the US, voluntary regulatory cooperation and reviewing market access for industrial products, including cars, one of Trump’s top demands.
But as part of the package, the EU also wants to solve the current blockade of the World Trade Organisation’s appellate body.
Malmström voiced hope that the outcome of the talks with the US Administration would be a “positive agenda” with no tariffs or quotas. But “realistically”, she didn’t expect that.
MEPs expressed their support for the Commission’s response to Trump’s threats and criticised his attacks against the rules-based multilateral trade system.
But some legislators, including the leader of the Greens group, Ska Keller, put the emphasis on bringing the case before the WTO and becoming more independent of the US economy, instead of counterattacking with European tariffs.