(VOVWORLD) - The already tense US-EU relationship following the US withdrawal from the nuclear deal on Iran is now facing a new challenge. As the US’s imposition of tariffs on EU steel and aluminum imports begins to take effect from Friday, June 1, a trade war between the two allies looms.
The US decision to levy a 25% tariff on steel imports and a 10% tariff on aluminum imports from the EU will take effect after a 2-month exemption period expires on Thursday.
In March, President Donald Trump said he would increase duties on metal imports, but would temporarily exempt the EU from the tariffs until further negotiations were finalized.
The US-EU trade tensions heated up the agenda of the G7 Finance Ministers’ Meeting, which opened on Thursday in Whistler, Canada.
"America first"
President Trump is consistent with his promise to put America first even at the cost of its long-term, close alliance with the EU. He justified the tariff imposition, explaining it protects national security and American producers from foreign producers on American soil. The US is the world’s largest steel importer with steel import volume 4 times higher than export volume and aluminum import volume 5 times higher than aluminum volume produced in the US in 2016. Commerce Secretary Wilbur Ross blamed the EU for failing to persuade Washington not to drop the EU from tariff exemption. He said the US and EU can still talk trade after tariffs.
Their trade conflict goes beyond metal products. Last year, the EU exported steel and aluminum worth 6 billion USD to the US, just one fifth of the bloc’s 300 billion USD total export turnover to the US. Steel and aluminum products account for a very small proportion of the EU’s trade surplus with the US. Trade protection measures are just a pretext for Trump to show how perseverant and radical he is in implementing the slogan “America first.”
Adverse impact on trade liberalization
 European Commission President Jean Claude Juncker at a press conference in Brussels on March 23, 2018 (Photo: Xinhua/VNA) |
The EU said the imposition of duties shows the US is turning its back on its close partners and that the EU has no choice but to protect its industry, employment, and interests. European Commission President Jean Claude Juncker said the EU will launch legal proceedings against the US in the World Trade Organization and take retaliatory actions in accordance with WTO rules. Analysts said Trump may ignore the case or even withdraw from the WTO. But what’s worse is that the move may cause a domino effect if other countries activate trade measures for national security reasons. Many fear that the ongoing tensions may evolve into a comprehensive trade war in the near future.
The imposition of new tariffs will not be able to protect interests and jobs of Americans as promised by President Trump. It will increase the price of goods, affecting American consumers and both the US and EU economies. US energy firm leaders are worried that the tariff hike will damage many new oil pipeline, drilling, and refinery projects.