The European Union is considering placing tariffs of 25% on close to $3.5 billion in imports from the U.S. if the plan U.S President Donald Trump has for applying duties to aluminum and steel is carried out, said sources in the EU.
The European Commission announced that it would respond in a firm way to the proposed import duties by the U.S. of 25% for steel and 10% for aluminum.
It spelt out that it would join in with others in a challenge with the World Trade Organization and consider its safeguard measures that it last deployed during 2002, to guard against aluminum and steel being diverted to Europe for other places if tariffs by the U.S. are imposed.
Another counter-measure that has been brought under consideration would be specifically targeting the U.S. as a way to rebalance trade between them, said the sources within the EU who requested anonymity.
The tariffs by the U.S. would be brought in officially under guidelines for national security, but the EU said that the military requirements for the U.S. represent less than 3% of the production and that the tariffs are nothing more than protectionism for manufacturers in the U.S.
Exports of EU steel into the U.S. during 2017 reached €5.3 billion equal to $6.53 billion and for aluminum more than €1.1 billion.
For certain grades, the U.S. cannot show an increase of any kind in imports during 2017, said the EU sources, meaning it could not apply the safeguard measures. For the EU, the exports of those grades reached €2.8 billion or $3.5 billion.
Assuming the tariffs in the U.S. fully covered steel for the EU, the bloc would put together its own 25% tariffs on the €2.8 billion in goods shipped from the U.S.
Close to a third would represent different steel grades, while another third were other industrial products, and the last third agricultural products.
A complete list of products will be presented to EU countries next week. The countries approval is needed. The rebalancing would take place over the next three months.
The proposed aluminum and steel tariffs for imports is expected to create problems with relations between the U.S. and Canada and could affect NAFTA, the North American Free Trade Agreement that is being renegotiated.