Trump’s steel and aluminum tariffs could weaken U.S. influence, says French foreign minister

Trump’s steel and aluminum tariffs could weaken U.S. influence, says French foreign minister

08/03/18 - :19 - French Foreign Minister Jean-Yves Le Drian said Thursday that President Trump’s plan to slap tariffs on U.S. imports of steel and aluminum would weaken American influence in the world if implemented, amid ongoing European concern that the White House could spark a trade war.

Trump is expected to sign measures as early as Thursday imposing import tariffs of 25 percent for steel and 10 percent for aluminum, despite a furious last-minute lobbying effort against the decision from Washington’s closest allies and top Republicans. Le Drian said Europe should answer any move “firmly.”

“Europe must show its power and sovereignty,” Le Drian told the French CNews broadcaster. Tariffs “might be attractive for the United States now, but in the long term it will have detrimental effects on America’s worldwide influence.” 

The pushback came as the top European Union trade official, Cecilia Malmström, planned to meet Saturday in Brussels with U.S. Trade Representative Robert E. Lighthizer and their Japanese counterpart. The meeting — scheduled before Trump’s decision to throw a wrench into international trade — was originally intended as a chance to coordinate policy to fight artificially cheap Chinese steel. Instead, a European official said, it would focus on the potential new tariffs and Europe’s response.

“We see this as an opportunity to have a frank discussion with Ambassador Lighthizer on the steel and aluminum tariffs announced by the U.S., and to once again make clear what the E.U. countermeasures would be. There’s no avoiding the elephant in the room,” the official said, speaking on the condition of anonymity to discuss internal meeting preparations.

White House officials said Wednesday that Trump might offer a temporary exemption from the tariffs to Canada and Mexico, which are negotiating revisions to the North American Free Trade Agreement (NAFTA) demanded by the White House. European Union leaders said that if any exemptions are granted across the Atlantic, they would in practice be extended to all 28 E.U. members.

Europe will “try to convince them not to trigger any major damages to the U.S. economy and to the world economy,” said Jyrki Katainen, a top European Commission official in charge of economic affairs. “If they try to make an exception to one of our member states, it means the E.U. as a whole.”

The European Union negotiates its trade policies as a bloc and does not have internal tariffs or borders on goods, meaning that any U.S. attempt to give an exemption to a single European country could theoretically be circumvented by shipping steel and aluminum from elsewhere in Europe to that country, then sending it onward to the United States.

Katainen warned that a 2002 effort by the Bush administration to impose tariffs ended with the loss of “thousands and thousands of jobs” in the United States.

Europe has warned it would hit back against U.S. tariffs with tightly targeted countermeasures. Higher tariffs on bourbon would strike against the home state of Senate Majority Leader Mitch McConnell (R-Ky.). Measures against Harley-Davidson and other motorcycles would hit Wisconsin, the home of House Speaker Paul D. Ryan (R-Wis.).

“We will defend our interests” if necessary, E.U. foreign policy chief Federica Mogherini said at a conference in Brussels. “Protectionism is not a good idea for the U.S. economy.”

Trump has cited national security as the legal basis for imposing the tariffs. Mogherini dismissed that reasoning, saying that the planned tariffs were “clearly” not meant to protect national security, since they would hit so many U.S. allies.

The European Commission, which is charged with handling E.U. trade policy, is expected to move quickly to announce tariffs if Trump signs off on the U.S. measures. Any E.U. tariffs would take about 90 days to go into effect, following public input. European Union leaders also say they will seek to fight the U.S. measures in the World Trade Organization.

Quentin Ariès contributed to this report.