Trump Is Targeting 10% Cut in EU Steel, Aluminum Exports to U.S. -- Update
May 22 2018 - 6:15PM
Dow Jones News
By Emre Peker
BRUSSELS -- President Donald Trump is weighing measures to cut
European Union steel and aluminum exports to the U.S. by about 10%,
in a sign the bloc's concessions to secure tariff exemptions aren't
meeting White House demands, EU officials familiar with the talks
said.
Washington proposed two options for Brussels: a quota fixed at
90% of U.S. imports from the EU in 2017 and a tariff-rate quota
that would target the same 10% reduction via levies, Poland's
Entrepreneurship and Technology Minister Jadwiga Emilewicz said
Tuesday after EU governments discussed U.S. trade relations.
"We are under the impression that somehow they want to limit
steel imports to the U.S.," European Trade Commissioner Cecilia
Malmstrom said of continuing negotiations with Washington before
briefing EU governments. "Aluminum as well," she said, without
providing details.
The EU is still trying to figure out precisely what Mr. Trump
wants ahead of his June 1 deadline, when the bloc's temporary
exemptions will expire, European officials said. Quotas are one
idea floated by U.S. negotiators, but their scope and details
aren't yet clear, EU officials said.
"They really still don't know how to introduce any reductions,"
Ms. Emilewicz said of the U.S. plans, expressing hope for permanent
tariff waivers. "We need to use each opportunity to discuss
[exemptions] with our American counterparts."
A spokesman for U.S. Commerce Secretary Wilbur Ross didn't
comment on the quota proposal.
Ms. Malmstrom has been in regular contact with Mr. Ross since
Mr. Trump's decision in March to impose tariffs of 25% on steel and
10% on aluminum. She was expected to hold another round of talks
with her U.S. counterpart on Tuesday, seeking to build on feedback
from EU members in her efforts to secure waivers.
A quota at 90% of 2017 exports would be "illegal" and Europe
wouldn't accept it , an EU diplomat said.
U.S. intentions to target European exports come despite a
four-point plan EU leaders put forth during their summit last week,
seeking to woo Mr. Trump with promises of market access for
American exports and an alliance to tackle global trade issues that
both sides see as priorities.
If the White House grants "unlimited" waivers to the bloc, EU
leaders said, Brussels would enter into talks with Washington on
slashing tariffs and improving regulatory cooperation.
The bloc also would be open to working with the Trump
administration to overhaul the World Trade Organization and deepen
energy links -- a nod to Europe potentially buying U.S. liquefied
natural gas.
"Is this going to be enough, I'm not sure, frankly," Ms.
Malmstrom said. "I think they don't think it's enough."
For the EU, South Korea's exemptions deal is a cautionary
tale.
Seoul agreed to cap its U.S. steel exports at 70% of the average
export total over the past three years. That created a daunting
task for South Korean steelmakers, the third-largest supplier to
the U.S., which filled their annual quota in nine out of 54
categories in the first four months of 2018. Quarterly limits
imposed by the Trump administration pose another challenge, with
any steel exports exceeding the cap facing delays, redirection or
destruction.
"The devil is in the details," an EU official said. "There is
more to a quota than catches the eye, it's about how you manage
it."
European officials have repeatedly called on Mr. Trump not to
punish U.S. allies for the global steel glut driven by
overproduction in China. The president's national security
justification for steel and aluminum tariffs amounts to illegal
protectionism under WTO rules, according to the EU. The bloc also
balks at the notion that its exports threaten the U.S.. Twenty two
of the EU's 28 members are also in North Atlantic Treaty
Organization allies.
"We are allies, but we are not vassals," French State Secretary
Jean-Baptiste LeMoyne said Tuesday at the Brussels gathering,
adding the EU was prepared to counter the Trump administration if
it doesn't grant an unlimited waiver to the bloc.
The EU has readied countermeasures, including EUR2.8 billion
($3.3 billion) worth of levies against American exports that can
swiftly go into effect if the president doesn't exempt the bloc
from his tariffs. Brussels also asked to join China's WTO challenge
against Washington's measures.
"We want to avoid a trade war," German Economic Affairs and
Energy Minister Peter Altmaier said Tuesday in Brussels. "It's
important to come to an agreement that is in the interest of both
sides."
--William Mauldin in Washington and Valentina Pop in Brussels
contributed to this article.
Write to Emre Peker at emre.peker@wsj.com
(END) Dow Jones Newswires
May 22, 2018 18:00 ET (22:00 GMT)
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