EU unable to secure clarity on exemptions from steel tariff

Top EU and Japanese trade officials said they would continue to press their case for exemptions from punitive US steel tariffs after a meeting with Washington's top trade representative on Saturday failed to provide clarity on how countries could apply for carve outs.

Cecilia Malmström, the EU trade commissioner, said after the meeting that "discussions will continue next week" with US authorities after a "frank discussion" with US trade representative Robert Lighthizer in Brussels. The meeting failed to yield assurances on whether the EU would be hit by the 25 per cent tariffs on steel and 10 per cent tariffs on aluminium that Donald Trump announced on Thursday.

Saturday’s EU-Japan-US meeting had been intended as an opportunity for the three countries to develop a joint front in dealing with China over what they argue is the country’s overproduction of steel. Instead, Mr Trump’s decision to hit out with additional tariffs meant that the gathering turned into a chance for two of the US’s major economic partners to demand answers as to why they are potentially in the administration’s crosshairs.

Hiroshige Seko, Japan's minister of trade and industry, told reporters after Saturday's meeting that he still hoped that Japan could secure an exemption. In comments reported by Reuters, he said the measures "could disrupt the steel and aluminium markets of the world, and have a negative impact".

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Mr Trump has hailed the tariffs as an example of his determination to protect core US industries. While Canada and Mexico were granted an explicit, temporary exemption, other countries have been left only with vague guidance that the rules will be applied flexibly.

Wider trade war

The announcement has led to countries clamouring for carve-outs while also preparing countermeasures that it is feared could lead to a wider trade war.

Brussels warned last week that it was fully prepared to take retaliatory action against €2.8 billion of US imports, ranging from motorcycles to peanut butter.

Nations have also rebuffed Mr Trump’s attempt to justify the tariffs on national security grounds. In a statement after Saturday’s meeting, the European Commission noted that both the EU and Japan were “longstanding security partners” of the US.

One person briefed on the talks said Mr Lighthizer had not been able to provide further clarity on who would be excluded or on the procedure for applying for exemptions.

Further guidance is expected from Washington in the coming days.

A spokeswoman for Mr Lighthizer declined to comment, while the president later tweeted on Saturday: “The European Union, wonderful countries who treat the US very badly on trade, are complaining about the tariffs on steel & aluminum. 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!” – Copyright The Financial Times Limited 2018