EU Leaders Awaiting Clarity Over U.S. Tariff Exemption -- 2nd Update
March 22 2018 - 10:02PM
Dow Jones News
By Emre Peker and Valentina Pop
BRUSSELS -- European Union leaders expect an exemption from new
U.S. tariffs on steel and aluminum kicking in on Friday, but they
are still waiting for an official notification from Washington.
"We think it was right that the EU sought dialogue, because we
don't think these tariffs are justified. But we have to wait
overnight to see what the decision of the U.S. administration is,"
said German Chancellor Angela Merkel at the end of the first day of
an EU summit here.
U.S. Trade Representative Robert Lighthizer earlier on Thursday
told the Senate that the tariffs, which take effect Friday, will be
"paused" for the EU, Australia, Argentina, Brazil and South
Korea.
Seeking to counter the global glut driven by Chinese
overcapacity, President Donald Trump has cited national security as
the justification for imposing the import tariffs -- 25% on steel
and 10% on aluminum.
EU leaders are expecting a formal notification from Washington
early Friday before signing off on a statement welcoming the
exemption, according to two EU officials familiar with the
talks.
The exemptions for the EU would come after intense European
lobbying to avoid an escalating trade spat between the longstanding
allies. European Trade Commissioner Cecilia Malmstrom rushed to
Washington this week to secure a waiver in meetings with
counterparts, including Mr. Lighthizer and Commerce Secretary
Wilbur Ross.
EU officials pointed out, however, that the temporary exemption
prolongs uncertainties in the trans-Atlantic relationship. In
exchange for a waiver, EU officials have committed to establishing
a working group with the U.S. that would explore ways to address
bilateral trade tensions.
"Many countries are calling to negotiate better trade deals
because they don't want to pay the steel and aluminum tariffs," Mr.
Trump said as he unveiled $50 billion in tariffs targeting China in
a separate set of trade measures -- and ahead of his expected
waiver for the EU. "We're just starting a negotiation with the
European Union, because they've really shut out our country."
Mr. Trump has repeatedly singled out Germany's trade surplus
with the U.S. and threatened levies against European cars. The U.S.
has blocked access for agricultural products from some EU members
for years, Ms. Malmstrom said, citing it as an "irritant" that the
bloc would like to discuss with Washington. EU officials didn't
elaborate on U.S. demands.
"We are not negotiating under threat," Ms. Malmstrom said. "But
we are always willing to talk about issues of common concern."
Some European capitals signaled an openness to fix trade
disputes with the U.S. An official in Berlin warned that while the
immediate tariffs threat could be skirted, Mr. Trump holds the
issue like the "sword of Damocles" over the EU.
An adviser to French President Emmanuel Macron said Thursday
that the EU would actively combat Chinese overcapacity with the
U.S. and consider addressing other trade issues.
"Working on one-off subjects in bilateral EU-U.S. relations is a
possibility," the French adviser said.
But European officials broadly cautioned against entering into a
comprehensive negotiation or effort to revive the effectively
frozen Trans-Atlantic Trade and Investment Partnership talks
between Washington and Brussels.
The U.S. and the European Union already impose relatively low
tariffs, and trade between them has soared, though the Trump
administration blames some EU duties for increasing the U.S. trade
deficit.
"There still is one point we need to clarify -- is the exemption
conditional and if so what are these conditions," Belgian Prime
Minister Charles Michel said. "We have to see how it's formulated.
The devil is sometimes in the details."
--
Bojan Pancevski
in Berlin and Will Horobin in Brussels contributed to this
article.
Write to Emre Peker at emre.peker@wsj.com and Valentina Pop at
valentina.pop@wsj.com
(END) Dow Jones Newswires
March 22, 2018 21:47 ET (01:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.