Time running out for EU exemption from trade tariffs

April 30 (UPI) — The European Union will make a last-ditch effort Monday to avoid U.S. tariffs on European steel and aluminum.

Cecelia Malmstrom, EU trade commissioner, will meet U.S. Commerce Secretary Wilbur Ross on Monday in hopes of averting imposition of a 25 percent tariff on steel and 10 percent tariffs on aluminum exports to the United States. EU sources said they are not optimistic of the outcome, The Guardian reported Monday.

British Prime Minister Theresa May, French President Emmanuel Macron and German Chancellor Angela Merkel spoke by telephone on Sunday, agreeing that reciprocal tariffs will be imposed on U.S. goods headed to Europe.

Merkel said Sunday, after her return from Washington, that Europe was “resolved to defend its interests within the multilateral trade framework.”

A spokesman for May said the leaders had spoken of “the vital importance of our steel and aluminum industries and their concern about the impact of U.S. tariffs” and “pledged to continue to work closely with the rest of the EU and the U.S. administration with the aim of a permanent exemption from U.S. tariffs.”

A temporary reprieve from the tariffs, extended to the European Union and to other U.S. allies, ends at midnight Tuesday. While the main focus of the U.S. tariffs is China, President Donald Trump has routinely criticized trade terms between the United States and EU countries. In response, the EU has insisted that trade will be discussed only after a permanent and unconditional exemption from U.S. tariffs is given.

In Malmstrom’s latest telephone conversation with Ross, Malmstom rejected Ross’ demand for a voluntarily limit of EU steel and aluminum exports to the United States of 90 percent of the average 2016-17 level. The move would reduce European exports by 16.3 percent.

“You don’t make trade war with your ally. It’s too complicated if you make war against everybody,” Macron said prior to his visit to Washington last week “You make trade war against China, trade war against Europe, war in Syria, war against Iran. Come on, it doesn’t work. You need allies. We are an ally.”

The EU, the United States’ biggest trading partner with a two-way trade valued by the European Commission at $765 billion for goods in 2017 and $528 billion in 2016 for service, has prepared a retaliatory strategy if the exemption is not renewed.

It has requested the World Trade Organization to investigate how the United States can compensate the EU if trade flow is affected by the tariffs. It also intends to join a separate WTO dispute, arguing that the tariffs violate the United States’ most-favored-nation principle. The EU will also attach $3.5 billion in tariffs to iconic U.S. goods exported to Europe. Harley-Davidson motorcycles, manufactured in the home district of House Speaker Paul Ryan, R-Wis., and Kentucky bourbon whiskey, made in the state Senate Majority Leader Mitch McConnell, R-Ky., represents, have been mentioned as targets.