The EU considers the US an ally, but is ready to put down 2.8 billion euros worth of duties on select American imports if it is not permanently exempt from looming steel and aluminum tariffs.
As the June 1 deadline for steel and aluminum tariff exemptions quickly approaches, the EU is joining the list of those ready to strike back with duties of their own.
US President Donald Trump ordered 25-percent tariffs on steel and 10-percent tariffs on aluminum imports back in March, but granted exemptions to the 28 countries under the EU.
In light of ongoing negotiations surrounding the North American Free Trade Agreement (NAFTA), Canada and Mexico were also given a temporary hall pass on the tariffs.
However, the EU has been vocal about the situation at hand, as it has vowed not to negotiate under threat. French President Emmanuel Macron echoed that sentiment in Bulgaria this week when he and fellow EU leaders came together for a summit.
“It’s Europe’s economic sovereignty, and what we are demanding is that we are exempted without conditions or time limits,” Macron said.
Similar to China’s approach with the tariffs, the EU has concocted a list of US products that could be met with duties — about 2.8 billion euros worth — in order to “rebalance” things if it does not receive permanent exemption.
German Chancellor Angela Merkel has a similar attitude toward the situation as Macron, and apparently other EU leaders.
“We have a common position; we want an unlimited exemption, but are then prepared to talk about how we can reciprocally reduce barriers for trade,” she told reporters in Bulgaria.
The EU is prepared to cooperate further on trans-Atlantic energy — liquefied natural gas in particular. It is also willing to collaborate on reforming World Trade Organization rules and to grant additional, mutual market accessibility to industrials, all in exchange for permanent exemptions, an EU source told Reuters.
EU Council President Donald Tusk, who chaired the Bulgarian summit, spoke out openly against Trump’s notion that the tariffs are essential for national security purposes.
“The EU and US are friends and partners. Therefore US tariffs cannot be justified on the basis of national security. It is absurd to even think that the EU could be a threat to the United States,” Tusk said.
“I can agree with President Trump when he says that unpredictability can be a very useful tool in politics. But only against enemies or opponents. Unpredictability is in my opinion the last thing we need when you are friends,” he added.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.