President Trump’s administration is planning to impose tariffs on European steel and aluminum imports after failure to win concessions from the European Union. This move that could provoke retaliatory tariffs and start a trade war.
U.S. and European officials held talks in Paris on Thursday to attempt to reach a deal, though hopes are low.
The tariffs are likely to go into effect on the EU with an announcement before Friday’s deadline, according to two people familiar with the discussions. The administration’s plans could change if the two sides are able to reach an agreement.
Trump announced in March that the United States would slap a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, citing national security interests. But he granted an exemption to the EU and other U.S. allies which expires Friday.
“Realistically, I do not think we can hope” to avoid either U.S. tariffs or quotas on steel and aluminum, said Cecilia Malmstrom, the European Union’s trade commissioner. Even if the U.S. were to agree to waive the tariffs on imported steel and aluminum, Malmstrom said, “I expect them nonetheless to want to impose some sort of cap on EU exports.”
If the U.S. moves forward with its tariffs, the EU has threatened to impose retaliatory tariffs on U.S. made goods.
Concerns about a global trade war are already decreasing investor confidence and could hinder the global economic upturn. European officials argue that tit-for-tat tariffs will hurt growth on both sides.
Tariffs on steel and aluminum imports to the U.S. can help local producers of the metals by making foreign products more expensive. But they can also increase costs for U.S. manufacturers who are unable to meet their needs sourcing locally and must import the materials. That hurts the companies and can lead to more expensive consumer prices, according to economists.