Britain's Theresa May could seek tariff deal with Trump, risking EU backlash

Trump shake hands with May during the World Economic Forum in Davos, Switzerland.
Trump shake hands with May during the World Economic Forum in Davos, Switzerland.PHOTO: REUTERS

LONDON (BLOOMBERG) - Britain refused to rule out seeking its own exemption from US steel tariffs, risking a legal dispute with the European Union that could sour Brexit talks.

EU officials are pressing President Donald Trump to exclude the bloc from the border charges he slapped on foreign steel and aluminium this week.

Britain said on Friday (March 9) that it's working with its EU partners on the matter.

But both Prime Minister Theresa May's office and the Department for International Trade wouldn't say whether Britain could legally accept a tariff exemption that does not apply to the rest of the EU.

British officials said they did not want to speculate on how the issue could be resolved.

Britain would risk a legal challenge from the EU if it went ahead with its own exemption, because its still a member of the bloc. Such a move would threaten to add further tension to already strained negotiations over Britain's withdrawal from the EU.

For Brexit enthusiasts like Trade Secretary Liam Fox, strengthening Britain's economic relationship with the US is a key advantage of the split.

Fox will travel to Washington next week and "will be making the case on behalf of the UK and on behalf of British industry," May's spokesman Max Blain told reporters in London on Friday.

"It would be a matter for the US to decide on exemptions."

British steel is used for US military equipment, which Fox said late on Thursday makes it "doubly absurd" to be caught in the measure. A key goal of the minister's trip will be to gather further details of Trump's proposals, Blain said.

EU officials underlined the need to work in unison.

"Our presumption is that the EU is a whole body and that the US will respect that," the bloc's trade chief Cecilia Malmstrom said.

"Otherwise, that is questioning the whole EU as a project, which is quite dramatic. And our UK friends have been crystal clear in working on European unity."


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