EU ripostes as Trump kicks off transatlantic trade war

Brussels (AFP) –


The EU on Thursday vowed unity and to retaliate swiftly against the Trump administration's harsh tariffs on steel and aluminium imports as Europe blasted Washington's 'America First' protectionism.

European powers had for months hoped to lure US President Donald Trump away from his tariff threat, but now faced the harsh reality of a looming trade war with their transatlantic ally.

German Chancellor Angela Merkel slammed the shock duties as "illegal" and said they risked sparking a disastrous "spiral" of retaliatory measures.

Europe will respond in a "firm and united" way to US tariffs, Merkel said with the pressure higher than ever to mend differences within the EU on how to tackle the Trump threat.

Export powerhouse Germany is highly reluctant to deepen the trade war, and until the last minute hoped to reason with Trump.

Instead, the American president ignored Germany's pleas and doubled down on protectionism by threatening a separate wave of duties on car imports in a direct affront to German automakers.

France had defended a tougher line, rejecting any serious talks on trade with the US until the tariff threat lifted.

But now,"it is important that the European response is as coordinated as possible," a French ministry source said.

- 'Bad day' -

"This is a bad day for the world trade," European Commission President Juncker told a conference in Brussels after Washington said new tariffs would be effective from 0400 GMT Friday.

"The European Union cannot react to that without any kind of reaction," said Juncker, whose commission handles trade matters for the 28 member states.

In anticipation, the EU already drew up a long list of counter-measures against the US, which include equivalent duties on a whole range of products including cranberries, motorcycles and bourbon whiskey.

As a precautionary measure, the commission, notified the World Trade Organization of eventual counter duties on May 18 that could come into force 30 days later and would affect some 2.8 billion euros in products.

The commission is now detailing those measures, but the final decision to greenlight the counter-measures falls to the EU's 28 member states, where the split views will be tested.

- 'Europe united' -

Juncker said that the EU would also launch a dispute settlement procedure against the United States at the WTO, a legal process that could take years.

Juncker's trade commissioner Cecilia Malmstrom said the EU had tried "everything to avoid this outcome" in talks with President Trump's administration over the last two months.

"I have argued for the EU and the US to engage in a positive transatlantic trade agenda, and for the EU to be fully, permanently and unconditionally exempted from these tariffs," the Swedish commissioner said.

"This is also what EU leaders have asked for," she added.

Malmstrom said the US side tried to use the threat of sanctions as "leverage to obtain concessions" from the EU but added "this is not the way we do business," especially between longstanding allies.

"Now that we have clarity, the EU's response will be proportionate and in accordance with WTO rules," she added.

In Washington, US Commerce Secretary Wilbur Ross said the Trump administration was following through on its threat to impose metal tariffs on not just the EU, but also Canada and Mexico.

Ross said talks with the EU had failed to reach a satisfactory agreement to convince Washington to continue the exemption from the tariffs imposed in March.

This effort included a failed offer by European leaders to negotiate a limited EU-US trade deal as well as open up the European market to US natural gas -- but only if an exemption was granted.