Trump presses EU on trade barriers in tit-for-tat move

He demands halt to tariffs on American goods following crunch talks between US, EU, Japan

WASHINGTON • President Donald Trump has renewed his demand that the European Union halt its trade barriers to US products in order to spare his allies new steel and aluminium tariffs.

Mr Trump made his comments after crunch talks in Brussels between EU negotiators and US Trade Representative Robert Lighthizer in an effort to defuse a bitter row that many fear could turn into an all-out trade war.

EU trade chief Cecilia Malmstrom said there was no "immediate clarity on the exact US procedure for exemption", following a trilateral meeting last Saturday with her American counterpart and Japanese Trade Minister Hiroshige Seko.

Responding on Twitter, Mr Trump wrote: "The European Union, wonderful countries who treat the US very badly on trade, are complaining about the tariffs on Steel & Aluminium.

"If they drop their horrific barriers & tariffs on US products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!"

Mr Trump's announcement of duties of 25 per cent on imported steel and 10 per cent on aluminium has stung the EU, along with other major partners including Japan.

"As longstanding security partners of the United States, (the EU and Japan) underlined to ambassador Lighthizer their expectation that EU and Japanese exports to the US would be exempted from the application of higher tariffs," an EU statement said after the talks.

Brussels has gone the furthest in fighting back against Washington's shock measures, loudly announcing a list of US products to be hit with countermeasures if its exports are affected by the tariffs.

In announcing the measures, European Commission president Jean-Claude Juncker taunted Mr Trump, saying the EU could match "stupid with stupid".

Mr Lighthizer, a loyalist to Mr Trump's "America First" mantra, made no official comment after the talks, but the three sides did agree on a series of next steps to address the oversupply worldwide of steel and other materials, mainly by China.

This progress was "unexpected" and a source of cautious optimism on solving the tariff row, said an EU official on condition of anonymity. "If Trump wants his allies to demonstrate that they are united in tackling problems with China, this is precisely that," added the source.

With tensions at a peak, the EU had sought to keep low expectations for any breakthrough last Saturday. European Commission vice-president Jyrki Katainen said it would be "a meeting, not THE meeting".

Along with a huge range of steel products, the EU's hit list of flagship American products lined up for countermeasures includes peanut butter, bourbon whiskey and denim jeans.

Germany - singled out for particular criticism by Mr Trump - accused Washington of protectionism, calling the tariffs an "affront to close partners".

German Chancellor Angela Merkel warned that "no one can win in such a race to the bottom", while French President Emmanuel Macron said that Mr Trump risked provoking a mutually destructive "trade war".

Mr Trump said the tariffs, which will come into effect 15 days after he formally unveiled them last Thursday, will not initially apply to Canada and Mexico.

He also added Australia to the list of likely carve-outs.

The EU exports around €5 billion (S$8.1 billion) worth of steel and €1 billion worth of aluminium to the US each year, and the European Commission, the bloc's executive arm, estimates that Mr Trump's tariffs could cost some €2.8 billion.

Brussels is also looking at "safeguard" measures to protect its industry, restricting the bloc's imports of steel and aluminium to stop foreign supplies flooding the European market, which is allowed under World Trade Organisation rules.

AGENCE FRANCE-PRESSE, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on March 12, 2018, with the headline 'Trump presses EU on trade barriers in tit-for-tat move'. Print Edition | Subscribe