EU said to mull settling row over US metal levies with quotas

By BLOOMBERG

BRUSSELS • The European Union (EU) is leaving open the option of a settlement with US President Donald Trump over his controversial metal tariffs on the basis of US import quotas, according to officials from the bloc.

An EU condition for such a deal would be that any US limits on steel and aluminium from the 28-nation bloc be set at levels no lower than its 2017 shipments to the American market, the officials in Brussels said on condition of anonymity. EU exports to the US last year of both types of metal were worth a combined €6.4 billion (RM29.96 billion).

Without taking any decisions, EU national representatives meeting in the Belgian capital last Friday didn’t rule out the possibility of a quota based accord in the run-up to the June 1 expiry of the bloc’s exemption from the US duties, according to two of the officials, who asked not to be named because the talks were confidential.

Trump, who introduced the levies in March on national-security grounds, excluded the EU initially until May 1 and last week prolonged the waiver for a “final” 30 days.

The EU’s potential willingness to tolerate quotas on its steel and aluminium exports to the US highlights the political pressures within the bloc to put short-term economic interests above policy principles. Quantitative restrictions on commerce are generally disallowed under World Trade Organisation (WTO) rules, which, however, can be enforced only after a complaint by a member country.

To date, the EU has loudly rejected the US tariffs of 25% on steel and 10% on aluminium as illegal under global rules, and demanded a “permanent, unconditional” exemption.

The bloc has threatened, without one, both to complain to the WTO and to impose tit-for-tat duties on €2.8 billion of imports of US goods including Harley-Davidson Inc motorcycles, Levi Strauss & Co jeans and bourbon whiskey.

At their meetings last week in Brussels, the EU national representatives stressed their preference for a full, unconditional waiver from the levies, according to the officials. Some member- country experts also expressed reservations about going down the path of quotas, which the White House has said it’s focused on in order to “restrain imports, prevent transshipment and protect the national security”.

French Junior Foreign Affairs Minister Jean-Baptiste Lemoyne said in an interview with Les Echos that France wants a full, permanent and unconditional exemption from tariffs and rejects a negotiation with the US. Enrico Brivio, a spokesman for the European Commission, which runs the bloc’s trade policy, didn’t immediately reply to a request for comment.

EU leaders plan to discuss trade and the US during a dinner session at an informal summit in Sofia, Bulgaria, later this month, according to a separate diplomat. EU backtracking would be no guarantee of a trans-Atlantic truce.

Before the initial waiver expired, the Trump administration offered the EU a quota equal to 90% of last year’s shipments to the US and the bloc refused the proposal, according to the officials.

Earlier last week, European Trade Commissioner Cecilia Malmstrom told EU national diplomats that no limits below the bloc’s 2017 export levels to the American market would be acceptable, the officials said.

Last year, the EU exported €5.3 billion of steel and €1.1 billion of aluminium to the US.