The risk of a trans-Atlantic trade war appears to be dying down because the there is a belief in the European Union that the Trump tariffs on steel and aluminum would not be imposed on it.
According to media reports quoting four anonymous EU officials hopes of exemption from the trade tariffs were brightened after the completion of a two-day meeting between European Trade Commissioner Cecilia Malmstrom and U.S. authorities in Washington. A 25% import tariff on steel and 10% tariff on aluminum has bene announced by the Trump administration.
“Cecilia Malmstrom had a good, very fruitful visit to Washington,” commission Vice President Jyrki Katainen said in a television interview on Thursday. “We have good opportunities now to solve the issue and stabilize, or calm down, the problem.”
It was during the briefing of the ambassadors of the 28 national governments of the EU about the issue in Brussels by the Commission that optimism appeared to emerge. Further discussions are to be held about the outcome of the meeting of EU leaders in the Belgian capital.
The Trump tariffs, which were imposed on grounds of national security, had allowed exclusion of Canada, Australia and Mexico. The Trump administration also announced possibility of such exclusions for its allies and this task was entrusted to Robert Lighthizer. A dead line of March 23 has been affixed for this purpose.
One country that would most likely not be excluded for sure is China which may also face an additional tariff of $50 billion over violations of intellectual-property rights, reported the media. The tariff valuation has been based on the damage estimates by the U.S authorities arising out of the violations.
Earlier, a collision course for a trade war between the U.S. and the EU was put in place after the EU made repeated warnings of possible retaliatory measures against the Trump tariffs even as the block also attempted to secure an exemption from the tariffs. The EU had warned of tariffs on 2.8 billion euros ($3.5 billion) of U.S imports into the EU which would include the likes of Harley-Davidson motorcycles, Levi Strauss jeans and bourbon whiskey.
The EU had also warned of introduction of “safeguard” measures that would stop diversion of tariffed metals into the block which were meant to be exported to the U.S. The Eu had also planned to file a complaint with the World Trade Organization against the Trump tariffs if an exemption was not given to it.
“There are prospects to start some sort of negotiating process,” Katainen said. “In trade wars there are no winners, only losers. And the losers are normal citizens who will lose their jobs.”
(Adapted from Bloomberg.com)