The US is set to begin charging import duties of 25percent on steel and 10percent on aluminium on Friday, although it appears to be ready at the last minute to consider exemptions beyond those already granted to Canada and Mexico.
EU leaders were due to meet yesterday after European trade commissioner Cecilia Malmström’s return from talks with US commerce secretary Wilbur Ross and US trade representative Robert Lighthizer on securing an EU exemption.
She briefed EU ambassadors and the European Parliament before the summit, indicating there was a willingness to find a solution to avert a trade war.
Malmström told lawmakers she was hopeful the US would exempt the EU from metals tariffs.
“It is the president who decides this but we expect that secretary Ross will recommend that the EU is excluded as a whole,” she told the trade committee of the parliament.
Lighthizer told the US Ways and Means Committee that the US was in talks with the EU, Argentina and Australia on granting possible exemptions to metals tariffs and hoped to settle the issue by the end of April.
Malmström and Ross said they had agreed to start immediate discussions on areas of trade concern, including steel and aluminium.
Trump’s final word is awaited, but Donald Tusk, who chairs EU summits, said he was cautiously optimistic.
“Meanwhile, leaders will discuss how to respond to President Trump’s overall approach to global trade, which could negatively affect jobs all over the world. If the US turns protectionist for good, the whole world will have a problem,” he said on the eve of the summit. “We are not there yet and there is still time to act sensibly.”
The European Commission has proposed that if tariffs are imposed, the bloc should challenge them at the World Trade Organisation, consider measures to prevent metal flooding into Europe and impose import duties on US products to “rebalance” EU-US trade.
The one word neither the Commission nor EU leaders will want to use is “retaliation”.
The EU leaders’ second topic of taxation also threatens to expose transatlantic strains.
On Wednesday, the European Commission proposed rules to make digital companies pay more tax, with US tech giants such as Google, Facebook and Amazon set to foot a large chunk of a potential 5billion (R72.9bn) bill.
EU economics commissioner Pierre Moscovici brushed off accusations that he was going after rich US tech companies to enrich EU coffers. France, Germany, Italy, Britain and Spain welcomed the proposals in a joint statement.