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EU’s fire and fury over Trump’s delaying tactics on trade tariffs

Luke James
Brussels correspondent
US President Donald Trump speaking outside the White House yesterday (Reuters)

US President Donald Trump’s decision to give a second stay of execution to the EU over his new trade tariffs has been blasted as insufficient in Brussels.

The White House announced a further one-month exemption from import tariffs of up to 25% on steel and aluminium for the EU, Canada and Mexico hours before they were due to take effect.

The US administration said it would give both sides the time to negotiate a permanent exemption to tariffs they insist are necessary to “restrain imports” and “protect national security.”

UK International Trade Secretary Liam Fox declared himself “delighted” with the breathing space.

But the EU, which is negotiating on behalf of all 28-member states, pushed hard for a permanent exemption and expressed dissatisfaction at the delay.

A European Commission statement said: “The US decision prolongs market uncertainty, which is already affecting business decisions.

“The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.”

That sentiment was echoed by Business Europe director Markus Beyrer, who said the exemption was “not enough” for industry which “needs predictability and stability.”

Mr Trump’s decision was made more difficult to swallow for the EU by an announcement that the US government had agreed permanent exemptions for Brazil, Argentina, Australia and South Korea.

EU trade Commissioner Ceclia Malmstrom now has 30 days to agree a permanent deal with US Commerce Secretary Wilbur Ross.

EU trade Commissioner Ceclia Malmstrom with US trade representative Robert Lighthizer (Getty)

Pressure was piled on those talks by a US government source who confirmed no further temporary exemptions will be granted beyond June 1.

UK Steel director Gareth Stace warned: “30 days does not give us much time and all signs point towards a US insistence on the restriction of steel exports by its allies.”

The organisation has said the tariffs would have a “profound and detrimental effect” on UK producers who exported 350,000 tonnes of steel to the US last year – 7% of their international business.

Across the EU, steel manufacturers exported 5 million tonnes to the US last year.

The EU has said it will put tariffs worth €2.8 billion on US goods, including peanut butter and jeans, if they are not granted a permanent exemption.

Some have said the stand-off should be resolved by reopening talks over a wider EU-US trade deal.

But the European Commission said today that they “will not negotiate under threat.”

And Bernd Lange, the chair of the European Parliament trade committee, said: “We must come to terms with the fact that the US are no longer a reliable partner.”

Even with an exemption, US tariffs could have negative consequences for European steel producers.

The European Commission has begun monitoring trade flows to assess whether cheap Chinese steel products that were flooding the US market are now heading for the EU.

If they find that is the case, they will impose their own measures to product European industry.

MORE: EU ‘confident’ of securing exemption from Trump’s steel tariffs