European Aluminium backs EU Trade Commissioner on US tariffs

London (Platts)--8 Mar 2018 712 am EST/1212 GMT

European Aluminium is backing EU Trade Commissioner Cecilia Malmstrom's stance on potential US tariffs against aluminum products from Europe, the industry group said Thursday.

In a press conference Wednesday, Malmstrom questioned the US government's stated justification for the tariff plan and outlined several potential EU responses.

"The Commissioner ticked all the boxes during yesterday's press conference," said Gerd Gotz, director general of European Aluminium.

The US will order tariffs of 25% on steel imports and 10% on aluminum imports, President Donald Trump told steel and aluminum company executives summoned to the White House March 1, adding that they will be "in place for a long period of time."

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The move follows investigations carried out between April 2017 and January 2018 by the US Department of Commerce under Section 232 of the US Trade Expansion Act of 1962, which concluded that steel and aluminum imports threatened US national security and recommended the imposition of trade restrictions.

The EU rejected the national security justification for the move, Malmstrom said.

"We cannot see how the European Union -- friends and allies of NATO -- can be a threat to national security in the US. We find that assumption deeply unjust," she said.

The EU also has "serious doubts" whether the US proposal is WTO-compatible, Malmstrom said, adding that the planned tariffs are in effect "an economic safeguard measure in disguise."

The EU is holding off taking formal action until details of the US tariffs are confirmed, but "we have made clear that if a move like this is taken it will hurt the European Union. It will put thousands of European jobs in jeopardy, and it has to be met by a firm and proportionate response," she said.

"Yes, it's unfair to justify any unilateral decision under the false pretense of national security. Yes, it's out of scope because it does not fix Chinese overcapacity, which is at the heart of the problem. Yes, the EU has to respond to stand in for our interests and the respect of international trade rules. She is spot on," said Gotz, welcoming the European Parliament's decision to include the topic as part of the debate in next week's plenary session.

"We hope discussions will lead to a firm resolution outlining the need to support aluminium jobs, investments and innovation," he said. "Moreover, our material is permanent, circular by nature and decisive to build the low carbon economy of the future in key markets such as mobility, building and packaging. A vague debate is not an option."

Malmstrom outlined three kinds of potential response to the US move. Firstly, the EU will support its rights within the WTO, and is in discussions with other WTO members who would be affected by US tariffs, she said.

But recognizing that WTO discussions will take time, the EU is also looking at "other, quicker measures to put in place, if we have to do so," Malmstrom added.

"There could be a surge of steel and aluminium imports following US tariffs. We are therefore getting ready to put in place our own safeguard measures," she said.

"We will be carrying out measures that maintain the existing openness of the EU market as much as possible and we will be urging our trading partners to do likewise. We do not want to encourage further closing of steel and aluminium markets worldwide," Malmstrom added.

Thirdly, the EU would be within its rights under WTO rules to impose tariffs on US products to "rebalance" the economic loss suffered as a result of US tariffs," she said.

"If the US Administration confirms its decision this week, we urge the European Commission to implement immediate market surveillance and, if necessary, safeguard measures," said Gotz.

"Any delay to implement such decisions will hurt our economies and the trust our companies and workers have in the EU to do their job," he added.

--Andy Blamey,
--Edited by Jonathan Loades-Carter,

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