Bloomberg News - Europe Stands Firm on Trade Position as Global Tensions Increase

by Helene Fouquet and Gregory Viscosi

 France and the European Union staked out strong positions on trade with the U.S. as global tensions escalated in the face of tariff threats.

After announcing levies on steel and aluminum imports last month, Trump granted a waiver to the EU until May 1, giving the region breathing space to resolve negotiations on security and trade issues. The EU has committed to finding a resolution to the dispute even as it struggles to work out the U.S. demands.

“There is no question of a softening or weakening in face of a unilateral decision taken by the U.S. on steel,” Benjamin Griveaux, a spokesman for the French government, said to reporters in Paris on Wednesday. France wants “to ensure trade law as well as reciprocity in trade with the U.S. is respected.”

Separately, a spokesman for the European Commission, the 28-nation bloc’s executive, warned against taking measures that could undermine the World Trade Organization, and said the commission would make sure any trade actions were compatible with global rules.

“The EU believes measures should always be taken within the World Trade Organization framework, which provides a number of tools to effectively deal with trade differences,” Commission Spokesman Daniel Rosario told reporters in Brussels. “We call on the relevant parties to ensure WTO compliance of their trade actions.”

In a different action, China, matching the scale of proposed U.S. tariffs, said it would levy an additional 25 percent levy on around $50 billion of U.S. imports including soybeans, automobiles, chemicals and aircraft. Global markets reacted with fear of an impending trade war, with the Dow Jones Industrial Average trading down 1.3 percent at 3:09 p.m. in London.

With little more than three weeks until the temporary moratorium on the metals tariffs runs out, the EU is still trying to identify a common approach to Trump. At stake is potential disruption to a relationship involving total EU-U.S. trade worth some $640 billion in 2016.

Europe must “have a dialogue but must also protect our industries,” Griveaux said.