EU Hunts for Formula to Avert Deeper Trade Conflict With U.S.

(Bloomberg) — The European Union scrambled to come up with a strategy to avoid U.S. tariffs on foreign steel and aluminum, signaling a readiness to accept American import quotas and to slash some EU duties in return for a permanent waiver.

With an EU exemption from the metal levies due to lapse on June 1, European Trade Commissioner Cecilia Malmstrom indicated that U.S. quotas on steel and aluminum from the bloc would be acceptable as long as they “totally respect the historical flows.” Malmstrom also said the EU was willing to discuss cuts in European import levies on industrial goods such as cars.

“I don’t think the exemptions will be prolonged,” she told reporters on Tuesday in Brussels before a meeting with trade ministers from the 28-nation EU. “We have to prepare for different scenarios.”

Since U.S. President Donald Trump imposed the tariffs on national-security grounds in March while offering temporary waivers to some trade partners, the EU has said the levies of 25 percent on steel and 10 percent on aluminum are illegal under global rules and demanded a “permanent, unconditional” exemption.

WTO Complaint

The bloc has threatened, without a permanent exclusion, both to complain to the World Trade Organization and to impose tit-for-tat duties on a range of U.S. goods. In a possible initial retaliatory step outlined last week, the bloc would apply a 25 percent levy as of June 20 on 2.8 billion euros ($3.3 billion) of imports of American products including Harley-Davidson Inc (NYSE:). motorcycles, Levi Strauss & Co. jeans and bourbon whiskey.

Last year, the EU exported 5.3 billion euros of steel and 1.1 billion euros of aluminum to the U.S. In terms of volume, the steel exports amounted to 3.4 million metric tons of finished products and 1.5 million tons of semi-finished goods and other types including wires and tubes.

Economy Minister Peter Altmaier of Germany, the EU’s biggest steel exporter to the U.S., said both sides must seek ways to avert a wider trans-Atlantic commercial conflict.

“We want to avoid a trade war,” Altmaier told reporters in his way into the Brussels meeting. “It’s important for jobs in Europe and Germany that we reach an agreement that takes into account the interests of both sides. Time is running out.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.