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Home / Business

EU moves ahead with counterstrike to US tariffs

By James McAuley, Quentin Ariès
Washington Post·
2 Jun, 2018 09:40 PM4 mins to read

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Prime Minister Jacinda Ardern says ministers are working to get an exemption for New Zealand from the US' imposition of tariffs on steel and aluminium.

A day after the United States announced that it would be imposing tariffs on steel and aluminum imports from the European Union, Canada and Mexico, European leaders took the position that the move was an illegal and unnecessary act of protectionist hostility.

They warned that it would be met with retaliatory countermeasures. But EU officials emphasised that they are not in a trade war with the United States.

French President Emmanuel Macron, who otherwise enjoys a strong personal rapport with President Donald Trump and who had lobbied against the tariffs during an April state visit to the White House, was unusually unsparing in his criticism.

Macron spoke with Trump this week and called the tariffs "illegal" as well as a "mistake", according to a readout released yesterday by the Élysée Palace.

The German government likewise declared in a statement: "We consider this unilateral measure to be illegal; the cited grounds of national security do not stand up."

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And British Prime Minister Theresa May said Friday that she was "deeply disappointed at the unjustified decision."

Cecilia Malmström, the EU's trade commissioner, said the 28-country bloc would file a complaint with the World Trade Organisation and, by June 20, submit specific countermeasures. A previously published list of American products that could face EU tariffs includes items with symbolic meaning, such as Kentucky bourbon, motorcycles and blue jeans.

"We are not in a trade war," Malmström said. "But we are in a very difficult situation caused by the United States."

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The dispute had some European foreign policy and trade specialists thinking back to the George W. Bush administration. In 2002, the Bush White House proposed similar tariffs but later withdrew them once the WTO deemed them illegal.

The key difference between then and now, European trade experts say, is tone.

United States announced that it would be imposing tariffs on steel and aluminum imports from the European Union, Canada and Mexico. Photo / AP
United States announced that it would be imposing tariffs on steel and aluminum imports from the European Union, Canada and Mexico. Photo / AP

"When Bush was putting tariffs up, there was always a side communication saying, 'We have to do this for domestic reasons, and it's not going to last forever, we'll take it away soon'," said Guntram Wolff, the director of Breugel, a Brussels think tank that specialises in economics.

"Now, that side communication isn't happening."

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US Commerce Secretary Wilbur Ross met with his European counterparts in Paris this week, but was unwilling to bend on any demands.

In much of Western Europe, there is also the lingering memory of the "freedom fries era", when US-European animosity over the Iraq war in 2003 escalated to the point that some conservative US lawmakers wanted French fries renamed in the House of Representatives cafeteria.

The disagreement over Iraq was seen at the time as a historic rupture to the transatlantic consensus. But the Iraq War represented a policy disagreement, political analysts note.

French President Emmanuel Macron called the US tariffs "illegal" as well as a "mistake". Photo / AP
French President Emmanuel Macron called the US tariffs "illegal" as well as a "mistake". Photo / AP

To many in Europe, what's happening now - with the trade dispute coming on the heels of America's withdrawal from the Iran nuclear agreement and Paris climate agreement, as well as Trump's unilateral decision to recognise Jerusalem as the capital of Israel - represents a more fundamental break.

"In 2003, America was making a mistake," said Dominique Moïsi, a foreign policy expert at the Institut Montaigne, a Paris-based think tank. "In 2018, America has entered a process of accelerated decline, which is unfortunately part of the decline of the West at large, part of the decline of democracy at large."

"It's as if there was too much America then, but too little America now - or an America that's too aggressive."

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A key question from the European point of view, Wolff said, is whether Americans continue to support a President who is transforming their country's persona on the world stage.

"There's a big worry and miscomprehension about how the United States could have elected Donald Trump and accepts the rhetoric that is ongoing in Washington," he said.

"We have a huge problem with the American government, with the White House," said Moïsi. "But American society - is it behind Trump or not?"

In 2003, he said, the prevailing perception was that the American people supported Bush's decision to invade Iraq, given the experience of the 9/11 terror attacks.

Now, he said, there may be an important difference.

"Let's not break completely with America, because this is not America."

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