EU pondering response to US tariffs

Brussels – The European Union could trigger countermeasures next week in response to US tariffs on steel and aluminium imports, a spokesman for the bloc’s executive said, while US President Donald Trump boasted that a trade war would be “good, and easy to win.”

On Thursday, Trump announced plans to slap tariffs of 25 per cent on all imported steel and 10 per cent on broad categories of aluminium imports.

Decision could be taken next week

“We have been preparing for this situation for a long time. And because of these preparations, now we are ready,” said European Commission spokesman Alexander Winterstein, adding that a decision on countermeasures could be taken next Wednesday, when top commission officials next meet.

He said the EU would also stand ready to protect Europe’s embattled steel market in case of a surge of imports into the bloc as a result of the US tariffs. The EU will further seek to settle the dispute before the World Trade Organization, he added.

“Trade wars are good”

Trump appeared unconcerned on Friday by the threat of countermeasures.

“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump tweeted.

“Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore – we win big. It’s easy!”

Critical voices

In Germany, the EU’s largest economy, Chancellor Angela Merkel added her voice to a chorus of political and industry leaders slamming the proposed import duties.

“The federal government rejects such tariffs,” said Merkel’s spokesman Steffen Seibert. “These tariffs would hit the international trade streams of our steel and aluminium industry severely.”

A “trade war” could be “in nobody’s interest at all,” Seibert added.

Tariffs lead to higher prices

Earlier, the Association of German Chambers of Industry and Commerce (DIHK) warned that other countries would follow the US lead and “hollow out” the whole system of world trade, “to everyone’s disadvantage.”

“It is clear that tariffs impede access to the US market and will lead ultimately to higher prices for US consumers,” DIHK head Martin Wansleben said in Berlin.

“Made in Germany” machinery worth 18 billion euros (22 billion dollars) was exported to the US in 2017.

The head of the German steel manufacturers’ association Hans Juergen Kerkhoff had earlier warned that if the EU kept its tariff-free status, there would be a “glut of steel” flooding into the EU from non-EU countries put off trading with the US by its tariffs.

Trump said he would sign a measure next week imposing tariffs on steel and aluminium products from around the world, under a rarely used 1962 law authorizing presidential action against imports that undermine US national security.

Calls for “harsh countermeasures”

German Economics Minister Brigitte Zypries said she could not understand the move. “It is incomprehensible that European or even German steel imports could endanger the national security of the US,” she said.

“Someone who talks so much about fair trade like President Trump should not resort to such unfair methods,” Zypries said, warning that the tariffs could set off “tectonic shifts in world trade.”

German Foreign Minister Sigmar Gabriel told Die Welt newspaper and the publications of the Funke Media Group on Friday that he viewed the tariffs with “the greatest concern.” Washington should be in no doubt that the EU would respond resolutely, he added.

Meanwhile, Austrian Chancellor Sebastian Kurz backed up Brussels’ approach, demanding “harsh countermeasures” to Trump’s planned tariffs.