The Strategist

The US imposed steel and aluminum duties on the European Union

06/01/2018 - 12:19

The US decision to introduce duties on steel and aluminum for producers from the European Union, Canada and Mexico came into effect at midnight on June 1, Washington time. On the eve, on Thursday, May 31, US Secretary of Commerce Wilbur Ross confirmed the fact that the decision was taken definitively. According to him, negotiations with the European Union did not lead to an agreement that would persuade the US to extend the postponement of duties introduced in March this year. Shortly thereafter, the European Union announced a forthcoming response.

As for Canada and Mexico, negotiations with these two countries on the revision of the North American Free Trade Agreement (NAFTA) are still dragging on, and, according to Ross, it is not yet possible to predict the date of their completion. Therefore, the US decided to impose duties on steel and aluminum for Canada and Mexico.

Government of Germany: The duties are illegal measure

Germany had previously repeatedly warned Washington against the escalation of the trade conflict. "The federal government rejects the duties imposed on the US on steel and aluminum," Germany's official spokesman Steffen Seibert said on May 31 in Berlin. "We consider this measure illegal, the given argument for protecting national security is unconvincing," he said further. According to him, this measure conceals the danger of a vicious circle of penalty measures, which in the end will harm everyone. The government of Germany will continue to protect free trade and open markets and rely on a multi-lateral approach to solving problems, said Seibert.

Merkel for the decisive response of the EU

German Chancellor Angela Merkel has promised a "joint and resolute" response to the US duties if they are introduced. She stated this on Thursday, May 31, in Lisbon shortly before Washington announced its decision. "The European Union has formed an unambiguous position on this issue and we are sure that the duties are contrary to the WTO rules," Merkel said.

The duties have been introduced since March 23. They amount to 25 percent for steel products, and to 10 percent - for aluminum. Duties on products from the EU were delayed twice, the last time - until June 1. Multiple attempts by Europeans to abolish penalties on an ongoing basis have not been crowned with success. As a countermeasure, the EU earlier promised to introduce a 25 percent duty on American goods, including orange juice, whiskey, tobacco and motorcycles. It is expected that the fees will amount to € 3 billion.