Interview: Europe not choosing sides in U.S.-China trade dispute

WASHINGTON (Reuters) - Europe will not choose sides in the trade dispute between the United States and China, a top European official said on Saturday, adding that the European Union's temporary exemptions from U.S. steel and aluminium tariffs should become permanent.

European Commissioner for Economic and Financial Affairs Pierre Moscovici said trade was one of the main issues discussed with U.S. officials on the sidelines of the International Monetary Fund and World Bank meetings this week in Washington.

Moscovici told Reuters he had met with U.S. Secretary of Commerce Wilbur Ross, Federal Reserve Chairman Jerome Powell, Treasury Secretary Steven Mnuchin and top White House economic adviser Larry Kudlow.

"Trade wars are like all wars - they are destructive," he said in an interview. "We must find a soft landing in the debate that is ongoing. This means first finding a way between the U.S. and the EU to ... move from a temporary exemption to a definitive exemption," he said.

"We are discussing it actively in a quite constructive spirit with our American friends and I am hopeful that we will have this decision by the 1st of May," he said, referring to the date on which the temporary exemption for the EU expires.

EU anger was stoked last month when President Donald Trump announced a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports to counter what he has described as unfair international competition. A number of countries, including those in the EU, were granted temporary exemptions.

Trump also has announced tariffs on Chinese goods, prompting retaliation by Beijing and fueling fears of a global trade war.

Moscovici said China needed to implement reforms and show openness in trade and solve the question of over-capacity in steel production, but he added that it should be done through the World Trade Organisation rather than a trade war.

Europe would not side with either the U.S. or China, he said. "This is not the way things need to be addressed."

"Choosing one side would mean that we enter into the climate of confrontation and this is not the way things need to be handled. Certainly there are imbalances and they need to be addressed, certainly there are problems and they need to be resolved, but not through confrontation," he said.

(Reporting by Jan Strupczewski; Editing by Paul Simao)