Donald Trump looks prepared to kick off a trade war with the European Union
- The US will impose steel and aluminium tariffs on imports from the European Union, according to The Wall Street Journal.
- The tariffs come after talks between the EU and US failed to produce an alternative trade deal.
- The EU is expected to respond with tariffs on US goods, setting off a likely trade war.
The US will impose tariffs on steel and aluminium imports from the European Union, according to a new report, after talks regarding an alternative remedy failed to produce an alternative deal.
The Wall Street Journal reported that the tariffs could be announced as early as Thursday.
The EU will almost certainly respond with their own tariffs, pushing the US and Europe closer to a trade war.
The tariffs are a culmination of a dramatic three months since US President Donald Trump announced a 25% steel tariff and 10% aluminium tariff.
- Trump initially granted the EU and other key allies a reprieve from the steel and aluminium tariffs with a May 1 expiration.
- After talks did not progress with the EU and a handful of countries — such as Canada and Mexico — on an alternative solution, Trump kicked the can down the road until June 1.
Even then, EU executives and leaders from members countries refused to negotiate until Trump dropped the threat of tariffs. So with no alternative deal in sight, the Trump team appears poised to move forward.
At an OECD event on Wednesday, US Commerce Secretary Wilbur Ross attacked the EU countries for not coming to the table while the tariffs were in effect. Ross cited the willingness of China to discuss a deal while subject to tariffs as an example of how negotiations should go.
"China is an interesting case in point," Ross said. "They are paying the tariffs, they came into effect in March and they haven’t used this as an excuse not to talk. It’s only the EU insisting we can’t negotiate if there are tariffs."
The decision will almost certainly be met with blowback from the EU. French President Emmanuel Macron, German Chancellor, and UK Prime Minister Theresa May said an a joint statement before the expiration of the first exemption that the countries should be ready in the event the US tariffs went into effect.
"The European Union should be ready to decisively defend its interests within the framework of multilateral trade rules," the trio said.
Philip Hammond, the UK’s Chancellor of the Exchequer, told Business Insider following the reports that the decision by the US not to extend the exemption was unfortunate.
"Well, we’re obviously disappointed. We’ve been lobbying for a continuation of the exemption, indeed a permanent exemption," Hammond said. "I don’t imagine this will be the end of the discussion."
When pressed on whether a longer exemption were possible, Hammond said that the Trump administration had been open to negotiation in the past.
"Look, I have always found the administration to be open to discussion," the Chancellor said. "They have a view. They have a position. But in my discussions with them so far — and I’m not primarily responsible for negotiating trade arrangements — but they’ve always seemed to me to be willing to listen, to talk about these things."
Previous to the exemption, the EU threatened to respond to the steel and aluminium crackdown with tariffs on US goods like motorcycles, blue jeans, and bourbon.
According to the Journal, the fight could still be avoided by a last-minute trade deal.. But such an agreement is highly unlikely.
Troy Wolverton contributed additional reporting.
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