EU, Japan pleas for tariff exemptions to avert trade war fall on deaf ears

The US is imposing a 25 per cent tariff on steel imports and 10 per cent on aluminum imports. Picture / Glenn Jeffrey

The European Union and Japan pressed US President Donald Trump's trade envoy today to exempt them, as long-time US allies, from upcoming steel tariffs that have sparked fears of a new trade war.

But they appeared to win no quick concessions.

EU Trade Commissioner Cecilia Malmstroem said after meetings in Brussels that she got "no immediate clarity on the exact US procedure for exemption", and that new talks are planned for next week.

The tariffs come into force in two weeks. If the 28-nation EU cannot secure an exemption, it has threatened to impose retaliatory tariffs on US products like peanut butter and orange juice. Japan has warned of the dangers of tit-for-tat measures.

Malmstroem said she had a "frank" discussion with US Trade Representative Robert Lighthizer about the steel tariffs, insisting that "the European Union must be excluded" because it is a close US ally.

The two also met with Japan's Minister of Economy, Trade and Industry Hiroshige Seko, and all three pledged in a statement afterward to work together to fight dumping that hurts jobs and industries around the world.

The meetings were previously planned, but took on greater importance because of Trump's announcement of a 25 per cent tariff on steel imports and 10 per cent on aluminum imports.

Key US trading partners and businesses have warned the tariffs could backfire, provoking a trade war and hurting allies like the EU and Japan more than China, their main target.

Trump has said Canada and Mexico are exempt for now, and other countries could be spared if they can convince the Administration their steel and aluminum exports don't threaten American jobs and industry.

Trump insisted in a phone call with French President Emmanuel Macron — a leading EU player staunchly opposed to the tariffs — that the "decision is necessary and appropriate to protect national security".

The White House said in a statement today that "both presidents discussed alternative ways to address United States concerns," without elaborating.

Japan's government has warned the measure could hurt its economic relations with the US. But Seko also cautioned that "falling to exchanges of unilateral measures will not be in the interest of any country", according to the Kyodo news agency. He was apparently referring to the EU threats of retaliation.

European Commissioner for Trade Cecilia Malmstroem, right, speaks with US Trade Representative Robert Lighthizer prior to a meeting at EU headquarters in Brussels. Picture / AP

The EU insists that it is committed to open, global trade. Malmstroem said the real problem is an oversupply of steel on global markets, and she rejected Trump's assertion that the tariffs are needed to protect US national security, especially when most EU countries are members of NATO.

The EU exported about 5.5 million tonnes of steel to the US last year. The US bought 5 per cent of Japan's steel last year but just 1.1 per cent of China's steel.

Foreign steel producers are not only concerned about losing access to the US market but also that steel from other exporters will flood already saturated markets, threatening jobs elsewhere.

The EU has warned that it stands ready to slap "rebalancing" tariffs on about 2.8 billion euros ($4.7b) worth of US steel, agricultural and other products, like peanut butter, cranberries and orange juice.

- AP