WASHINGTON and European Union (EU) — the world’s two largest economies — were on an accelerating collision course on Wednesday as Donald J. Trump’s administration vowed to unveil new tariffs on steel and aluminum within days, and Brussels readied to retaliate.
As the White House forged ahead with Mr. Trump’s nationalist economic agenda — triggering howls of protest from fellow Republicans, a walkout by a top presidential aide and a market sell-off — European leaders warned the US president against starting a trade war.
The sparring came just six weeks after Mr. Trump’s conciliatory words at the World Economic Forum in Davos, where he pledged that his “America First” vision did not mean “America alone.”
White House press secretary Sarah Sanders sought to calm nerves, saying a detailed decision would come by the end of the week on the tariffs — whose sudden announcement by Mr. Trump last week opened a chasm among his staff, with economic advisor Gary Cohn quitting Tuesday following a pitched internal battle.
With Mr. Cohn’s exit reverberating through global markets fearful the world could backslide on trade, Trump Cabinet members appeared on television to make the president’s case, with Commerce Secretary Wilbur Ross insisting the US was not “looking for a trade war.”
“We’re going to have sensible relations with our allies,” Mr. Ross told CNBC, claiming Mr. Trump’s policy was well “thought through.”
But in Brussels, the bloc wasted no time in outlining planned retaliatory measures on targeted American exports — from steel, industrial and agricultural items to flagship products such as jeans and motorbikes, peanut butter and bourbon — to be rolled out if the US makes good on its threat.
“Trade wars are bad and easy to lose,” EU President Donald Tusk told a news conference Wednesday, directly rebuffing Mr. Trump’s assertion last week they were “good and easy to win.”
Warning of “a serious trade dispute” between Washington and the rest of the world, Mr. Tusk said leaders of the bloc would hold emergency talks on the issue on March 22-23.
EU Trade Commissioner Cecilia Malmstroem doubled down, saying a full-on transatlantic trade war was “not in anybody’s interests.”
“A trade war has no winners,” Sweden’s Ms. Malmstroem told reporters after the European Commission discussed the tariffs.
“We should be very careful with that word… there are only losers in that, and that’s why we will respond in a proportionate and balanced way.”
‘THOUSANDS’ OF JOBS AT RISK
The EU is holding fire on its reprisals for now — as Mr. Trump has yet to sign into effect his aggressive plan, having floated 25% tariffs on steel and 10% on aluminum to correct what he calls unfair competition for US industry.
But a hit list of targeted US exports has been drawn up.
European Commission chief Jean-Claude Juncker had threatened to hit big-name US brands such as Harley Davidson motorbikes and Levi’s jeans with import duties, prompting Mr. Trump to fire back a threat to tax cars from the EU.
Despite Mr. Juncker’s headline-grabbing threat to iconic brands, the EU’s list, written in the dry language of customs regulations, does not mention specific businesses.
Obtained by AFP, the list includes “men’s or boys’ trousers and breeches of cotton denim” and “motorcycles including mopeds” with engines of 500 cc capacity and above — which includes Harley Davidson models.
Sweetcorn, cranberry juice and peanut butter are all featured along with cigarettes, cigars and playing cards.
Ms. Malmstroem said the EU was still trying to persuade Washington not to go ahead with the tariffs, which she said would threaten “thousands of European jobs.”
The EU is also looking at “safeguard” measures to protect its own industry — restricting the bloc’s imports of steel and aluminum to stop foreign supplies flooding the European market, which is allowed under World Trade Organization rules.
Mr. Juncker, who on Wednesday met Lakshmi Mittal, the boss of the world’s top steelmaker ArcelorMittal, said last week the EU would “react firmly” to protect European industry.
Europe exports around five billion euros’ ($4 billion) worth of steel and a billion euros’ worth of aluminum to the US each year, and the commission estimates Mr. Trump’s tariffs could cost some 2.8 billion euros. — AFP