EU’s Trade Chief to Press U.S. Counterparts on Tariffs Wednesday

BRUSSELS—The European Union’s top trade official will meet U.S. counterparts in Paris on Wednesday, according to EU officials, in a last-ditch effort to secure waivers from steel and aluminum tariffs and to engage Washington on efforts to tackle China’s market-distorting policies.

European Trade Commissioner Cecilia Malmstrom will press U.S. Commerce Secretary Wilbur Ross for exemptions just ahead of a Friday deadline, when President Donald Trump’s temporary waivers to the 28-member bloc expire.

Ms. Malmstrom will also meet with U.S. Trade Representative Robert Lighthizer on Wednesday to discuss the global trade agenda, and the two officials will join their Japanese counterpart, Hiroshige Seko, Thursday to advance a joint push targeting unfair practices.

The crunch meetings, following months of uncertainty, will take place on the sidelines of a ministerial gathering of the Organization for Cooperation and Economic Development in Paris. The OECD discussions will focus on the “state and outlook for multilateralism,” just as Mr. Trump enacts his “America First” policies to the chagrin of U.S. allies led by the EU.

European officials have been scrambling to address Mr. Trump’s demands amid deepening policy differences between the trans-Atlantic allies on issues ranging from trade to foreign policy and defense. Brussels and Washington have made little headway in talks since early March over Mr. Trump’s steel and aluminum tariffs, seeking to avert a trade war as both the EU and the U.S. threaten tit-for-tat measures.

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”We simply don’t know where this will land,” an EU official said.

Representatives for the U.S. Commerce Department and USTR didn’t immediately respond to requests for comment on Monday. Mr. Ross, the commerce secretary, has said the U.S. would only waive the tariffs on steel and aluminum for countries that agree to quotas—restrictions on the volume of steel or aluminum they can export. By restricting the steel trade, the move would still boost reliance on the U.S. domestic steel industry and would prevent countries from simply avoiding the tariffs by shipping everything through a country with a waiver. The countries that have been granted waivers, including South Korea and Argentina, have agreed to accept such quotas.

Meanwhile, EU officials have been trying to convince their U.S. partners to work together against China’s growing economic might. Mr. Trump’s imposition of tariffs against the bloc would ignore the root cause of steel and aluminum overcapacity in China that is driving the global glut, and unfairly punish an ally, EU officials say.

Brussels, Washington and Tokyo agreed in December on the sidelines of a World Trade Organization gathering in Buenos Aires to join forces against unfair trade policies that the allies often attribute to Beijing.

After Mr. Trump unveiled his steel and aluminum tariffs, Ms. Malmstrom and Mr. Seko met with Mr. Lighthizer in Brussels to discuss their trilateral effort. The EU and Japan also pressed the U.S. to spare them from the steel and aluminum tariffs.

The results were mixed. EU got a waiver of just more than five weeks—which was then extended until June 1—while Japan was slapped with the duties despite repeated pleas from Tokyo for a compromise.

In a sign that the three partners are trying to compartmentalize their differences, EU, Japan and U.S. officials will once again meet in Paris on the OECD sidelines. Their efforts will focus on advancing a seven-point plan agreed to in March to change the WTO and tackle common concerns.

An alliance against unfair trade practices was also one of the four proposals EU leaders put on the table this month in Sofia, Bulgaria, where the bloc’s governments agreed on concessions to secure waivers. The offer also includes a tariff-slashing agreement, regulatory cooperation and deeper energy links that could help the U.S. export liquefied natural gas to Europe. Ms. Malmstorm has engaged U.S. counterparts with the proposition.

“She has a mandate endorsed by all the European leaders, which is not a bad negotiating position,” an EU diplomat said Monday. “There is something she can offer, which was spelled out in Sofia, but I don’t know if that will be sufficient.”

Ms. Malmstrom briefed EU governments last week about potential U.S. measures against the bloc, including quotas that could potentially cap European exports at 90% of their 2017 levels.

Mr. Trump’s decision last week to launch a national-security investigation into U.S. car imports could also widen the U.S.-EU trade spat brewing since the president took office last year. He had cited U.S. security as a reason to enact tariffs of 25% on steel and 10% on aluminum exporters, too.

“We believe that there is no justification for the U.S. to impose tariffs on steel and aluminum on grounds of national security,” European Commission spokesman Margaritis Schinas said last week. “Invoking national security would be even more far-fetched in the case of the car industry.”

The EU has repeatedly called for an unconditional exemption from the metals levies, which Brussels and other U.S. trading partners have called illegal under WTO rules. Brussels is prepared to swiftly impose duties worth €2.8 billion ($3.3 billion) on American exports to Europe unless the White House shields EU steel and aluminum makers from U.S. levies.

Mr. Trump has said Europe treats the U.S. unfairly and demands lower tariffs on a range of American products led by cars, among other concessions. So far, the EU’s offers have done little to move the president’s opinion, European officials said.

“I think they don’t think it’s enough,” Ms. Malmstrom said last week.

Write to Emre Peker at emre.peker@wsj.com

Appeared in the May 29, 2018, print edition as ‘EU Officials to Press U.S. on Tariffs.’

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