European Union braces for trade war as U.S. announces steel tariffs


But they appeared to win no quick concessions.

The American president made his comments after crunch talks in Brussels between European Union negotiators and US Trade Representative Robert Lighthizer in an effort to defuse a bitter row that many fear could turn into an all-out trade war.

Other officials at the EU, by far the biggest trading partner of the United States by value, have warned it could take countermeasures including European tariffs on USA oranges, tobacco and bourbon. Japan has warned of the dangers of tit-for-tat measures.

EU Commissioner Cecilia Malmstrom, who coordinates policy for the world's biggest trading bloc, said she shared US concerns about overcapacity in the steel sector but did not believe in tariffs as a way to solve the problem.

Any Japanese response, he said, would be in line with World Trade Organization rules: "If there is a violation, then we will seek consultations", Seko said.

Lighthizer didn't comment publicly after the meetings.

Canadian cabinet members also kept phone lines "humming" with their US counterparts in an all-out push that recalled a lobbying effort in April 2017 to persuade Trump not to withdraw from NAFTA but to pursue re-negotiations instead. "It will all work out!"

The exemptions for Canada and Mexico, which are temporary, were also seen as being prompted part by the North American Free Trade Agreement talks, where US negotiations could use the prospect of making them permanent as a bargaining chip.

The Trump's protectionist steel tariff sparked outrage across the globe, AFP reported. The White House said in a statement Saturday that "both presidents discussed alternative ways to address United States concerns", without elaborating.

European industry associations called on Malmstrom to respond if the EU was subjected to the tariffs, saying they would hit the steel and aluminum sectors hard.

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"Working very quickly on a security agreement so we don't have to impose steel or aluminium tariffs on our ally, the great nation of Australia!" he tweeted. "Big Deficit. If not, we Tax Cars etc. FAIR!"

Key U.S. trading partners and businesses have warned the tariffs could backfire, provoking a trade war and hurting allies like the European Union and Japan more than China, their main target.

The EU is also maintaining a threat of counter-measures that would target USA imports ranging from maize to motorcycles, and may publish its list next week to allow industry and other interested parties to give their input. He was apparently referring to the European Union threats of retaliation.

Canada is the biggest source of USA steel imports, while Mexico is in the top five, meaning a significant share of imports will be exempt from the tariffs.

The EU insists that it is committed to open, global trade.

Asked at the conference whether she was ready to react if the 28-country European Union was included in the USA tariffs, Malmstrom said she stood ready to go to the WTO, the global trade arbiter, to impose the bloc's own safeguards within 90 days.

The EU exported about 5.5 million tons of steel to the US a year ago.

As well as making it harder for European metal to find buyers in the U.S., tariffs could also mean other foreign producers redirect their output to the EU, pushing the market there down.

The EU has warned that it stands ready to slap "rebalancing" tariffs on about 2.8 billion euros ($3.4 billion) worth of USA steel, agricultural and other products, like peanut butter, cranberries and orange juice.