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European Union to strike back against Trump’s ‘dangerous’ steel tariffs

The EU is opening a case at the World Trade Organisation after the US imposition of a 25% duty on European steel.

The European Union is set to strike back against Donald Trump’s “illegal” and “dangerous” steel tariffs.

Cecilia Malmstrom, the EU trade commissioner, announced the EU would be seeking to implement a number of retaliatory tariffs on American products by June 20.

The move comes after Mr Trump’s decision to impose a 25% duty on European steel and a 10% duty on European aluminium.

Ms Malmstrom accused Mr Trump of “playing a dangerous game” as she confirmed the EU would be taking “proportionate and measured” action against the US.

She said: “This is further weakening the transatlantic relations and it also increases the risk of severe turbulences in the markets globally.”

Ms Malmstrom said a final decision on what products would be hit with tariffs had not yet been made, but added that they would be from an already published list which includes the likes of Levi’s jeans, bourbon whiskey, cranberries and peanut butter.

She said: “We are not seeking to escalate any situation but we need to respond and we’ll do so in a measured manner, but not responding would be the same as accepting these tariffs which we consider are illegal.”

The commissioner refused to say Mr Trump had started a trade war, but said he had created a “very worrying situation”.

She said: “It could escalate and also the economic recovery that we have seen lately, notably in the European Union but globally, risks to be diminished by this.”

Mr Trump originally imposed the tariffs in March, saying a reliance on imported metals threatened national security.

But he exempted Canada, Mexico and the European Union to buy time for negotiations – a reprieve that expired at midnight on Thursday.

The director of trade body UK Steel, Gareth Stace, said he was “very, very worried” about the potential impact of a “double whammy” on British producers from the Trump administration’s decision.

UK steel producers could be shut out of an American market where they sold around £350 million of exports last year, while also facing increased competition from a “tsunami” of cheap steel diverted away from the US, he said.

Mr Stace told BBC Radio 4’s World At One that it was too early to speculate on the likely impact on jobs, but said: “At worst, we could fall straight back into the crisis we suffered in 2015/16, which was the worst steel crisis in a generation.

“We are heading for a trade war, which is going to be all losers – there will be no winners. The US economy will suffer as much as any other economy.”

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(PA Graphics)

Mr Stace said the EU should activate “safeguard measures” to prevent European markets being disrupted by a surge of as much as 25 million tonnes of steel diverted from the US.

Labour’s shadow international trade secretary Barry Gardiner earlier warned the UK Government to “strongly respond” to the move.

Mr Gardiner, speaking to Radio 4’s Today programme, said: “The president has said that he believes he could win a trade war, we think that a trade war is in nobody’s interests.”

He added: “We believe in a rules-based system, a multilateral system, President Trump doesn’t and we must understand that. He wants to break up that system.

“We have to respond strongly to it and make it clear to him that we’re not susceptible to the intimidation and the threats and the bullying that he’s putting in place.”

International Trade Secretary Liam Fox said in a statement that the UK would support any EU appeal to the WTO.

Dr Fox said: “I have been very clear these tariffs are not justified. We have not ruled out counter measures and will support any EU appeal to the WTO.

“But as the CBI have said, we do not want a trade war which does more to harm UK industries and consumers.”

Former White House press secretary Anthony Scaramucci, also speaking to Radio 4, said that with Mr Trump there was “always room for negotiation”.

He said: “I am sure that there are chips on both sides that can get traded to make the problem go away.”

Mr Trump had campaigned for president on a promise to crack down on trading partners who he said exploited poorly negotiated trade agreements to run up big trade surpluses with the US.

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