The European Union should unite in response to any U.S. tariffs on its steel and aluminium exports — and it could retaliate alongside nations from outside Europe, the French economy and finance minister told CNBC.
“I think the first is to have a common response from the member states from the European Union,” Bruno Le Maire said on Monday. But then, if other countries want to take part in the EU response, “of course, we are kind of open to these discussions.”
He called for “European forces to think about common concern, a common response, and to deliver a response if necessary.”
Le Maire’s comments come after U.S. President Donald Trump announced last week a proposal to raise import taxes to 25 percent on steel and 10 percent on aluminum. The tariffs could particularly hurt car exporters and construction firms in countries around the world that are on the tariffs list.
Trump said he believes the tariffs will help deal with overcapacity in the steel industry and China’s practice of “dumping” excess steel onto other countries. The EU sees the move as protectionist, limiting free trade and, along with other nations including China, has said the move is tantamount to a “trade war.”
The U.K., EU and Japan hope to negotiate exemptions from the tariffs. Mexico and Canada are already exempt.
Canadian Prime Minister Justin Trudeau told CNBC on Monday that Canada’s exemption from the tariffs has nothing to do with North American Free Trade Agreement (NAFTA) negotiations but he thanked Trump for the “special consideration” given to Canada over the tariffs. He added that he was willing to go further in cooperation with the U.S.
“We are also very worried about global oversupply, about China dumping and other places dumping their steel and aluminum and it’s affected our workers here,” Trudeau said. “We’ve put in very strong measures, some of the strongest in the world against dumping, but as I said to the president and as I said to congressional leadership, I’m happy to work with the U.S. to go even further with them.”
The EU reacted angrily to Trump’s announcement with the European Commission announcing last Wednesday that it would raise import duties on archetypal U.S. goods including bourbon, peanuts and cranberries if the U.S. went ahead. The EU’s trade chief Cecilia Malmstrom commented last Friday that the EU should be excluded from tariffs.
On Monday, Trump tweeted that Commerce Secretary Wilbur Ross will be “speaking with representatives of the European Union about eliminating the large Tariffs and Barriers they use against the U.S.A.”
The tide of opposition to tariffs has continued in the EU with the region’s finance ministers voicing their dismay to the idea as they arrived for a meeting of the Eurogroup in Brussels on Monday.
Commenting as he arrived at a meeting, Netherlands Finance Minister Wopke Hoekstra told CNBC that tariffs were “a bad idea.”
“Let me be clear. I think this is a bad idea; it’s bad for European citizens, for Dutch citizens and it will turn out to be bad for U.S. citizens as well, so I very much hope that we can make sure that we avoid going down such road,” he said.
Hoekstra didn’t believe that retaliatory tariffs would be productive, however.
“We shouldn’t go down this road,” he said, “because it won’t be in the interests of us and not in the interests of the U.S. either, but it is a scenario that in my mind the European Union has looked upon.”
Meanwhile, Germany’s Acting Finance Minister Peter Altmaier called on all parties to keep trade as open as possible.
“I think there is a responsibility for everybody to keep international trade as fair and as open as possible,” he said as he arrived for the Eurogroup meeting.
“This is in the interest of everybody and it will help us grow our economies,” he added.
