EU industry raises alarm bells over U.S. tariff move

Commission warns of ‘WTO-compatible countermeasures’

March 02, 2018 09:53 pm | Updated December 01, 2021 12:38 pm IST - London

Jean Claude Juncker

Jean Claude Juncker

Politicians, industry, and unions in Europe have reacted with alarm to the U.S. government’s announcement of restrictions in the form of a surcharge on imports of steel and aluminium, with the European Commission warning of proposals for “WTO-compatible countermeasures” to rebalance the situation.

“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” said Jean Claude Juncker, the President of the European Commission.

“Protectionism cannot be the answer to our common problem in the steel sector. Instead of providing a solution, this move can only aggravate matters,” he said, following the announcement of import duties of 25% on steel and 10% on aluminium on Thursday.

Cecilia Malmstrom Commissioner for Trade warned that the move would simply raise costs and reduce choice for U.S. consumers of steel and aluminium.

“These U.S. measures will have a negative impact on transatlantic relations and on global markets,” she added. In 2017, the EU exported 5 million tonnes of steel to the U.S. out of a total export volume of 40 mt , according to EU steel trade association EUROFER. “In the current context of massive global excess steel capacity, markets will be forced to take preventative contingency actions to avoid domestic market disruption from traded deflection,” said its director, Axel Eggert.

Tata Steel Europe, for which the U.S. represents 10% of its sales, welcomed the EU’s pledge of swift action.

“The EU must not allow the moderate recovery in our industry over the last year to be destroyed by the EUs most important ally,” said a Tata Steel Europe spokesperson.

The concerns were echoed in individual European markets, including in Britain, which exports some £360 million of high value steel products to the U.S., or around 15% of the sector’s exports, according to industry body U.K. Steel.

In addition to hitting U.S. exports, U.K. Steel warned the U.S. move could have a knock on effect on markets such as the U.K., with steel diverted away from the U.S. to other markets.

Protectionist move

“In its imagined post-Brexit role as the vanguard for global free trade, it must remember that not everyone is on the same page and not everyone is playing by the same rules. Whilst we have to resist any urge to mirror such protectionist moves, we must at the same time be clear-eyed and equip ourselves with tools to respond effectively and protect our interests when necessary,” said U.K. Steel Head of Policy, Richard Warren.

German Chancellor Angela Merkel’s spokesperson said the federal government rejected the tariffs, and pledged to stand side-by-side the European Commission, AFT reported.

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