US planning to impose steel, aluminum tariff on EU: report

The Trump administration is planning to go ahead with its plan to impose tariffs on steel and aluminum imports from the EU, which could draw sharp retaliation from the bloc, a media report has said.

President Donald Trump had announced in March to impose an import tariff of 25 per cent on steel and 15 per cent on aluminum, based on addressing the perceived threat to national security.

On April 30, he extended for 30 days the temporary exemption from the steel and aluminum tariffs for Canada, Mexico and the EU to allow for further negotiation.

The decision, likely to be announced as early as today, comes after the administration's inability to win concessions from European countries, The Wall Street Journal said.

The deadline for getting concessions from Europe ends tomorrow, June 1.

"The move, which has been threatened for months, is almost certain to draw response from the EU, which has threatened to retaliate with its own tariffs on such American products as motorcycles, jeans and bourbon," the daily said.

Trump had granted indefinite exemptions to Argentina, Australia and Brazil, given agreements in principle reached with those trading partners.

South Korea also received a permanent exemption from steel tariffs, having negotiated instead an absolute quota equivalent to 70 per cent of 2015-2017 imports. South Korea has not negotiated an exemption for its aluminum exports.

Among major steel exporters to the US, which are not exempted, are India, Japan, Russia, Taiwan, Turkey, China, Vietnam, Thailand, South Africa and the United Arab Emirates.

Major suppliers of aluminum which are not exempted are China, Russia, the United Arab Emirates, Bahrain, Iran, South Africa, Qatar, Japan, Indonesia and Venezuela.

In 2017, US imports of steel and aluminum products covered by Section 232 tariffs totalled USD 29 billion and USD 17.4 billion respectively.

The EU alone accounts for USD 5.9 billion or 20.6 per cent of the total steel imported into the US.

India on the other hand exports USD 761 million worth of steel to the US, which is 2.6 per cent of the total import.

On the other hand, Canada with USD 7 billion or 40.5 per cent of the exports, is the top supplier of aluminum to the US followed by the EU (USD 1.2 billion or 7.2 per cent).

In 2017, India exported USD 382 million worth of aluminum to the US, amounting to 2.2 per cent of total aluminum into the country.

According to Commerce Secretary Wilbur Ross, the US wants to keep negotiating a possible deal that opens markets in Europe to US exports.

"It's not that you can't talk just because there are tariffs," Ross said in Paris at the Organization for Economic Cooperation and Development.

"God knows there are plenty of tariffs the EU has in place on us," he said.

The EU disputes the American argument.

"We have not seen any analysis that shows these exports pose a problem to national security," David O'Sullivan, the EU ambassador in Washington was quoted as saying by the daily.

"If the United States wants to open discussions on a possible sort of trade deal, we don't think slapping tariffs on our aluminum and steel exports is a way to start off," he added.