Matthias Machnig, German deputy economy minister, has stated that the EU trade ministers agreed at a meeting, held in Sofia on February 26-27, to respond with counter measures if the US imposes import tariffs on steel and aluminum products, according to Reuters.
On a conference call, Mr. Machnig stated that the proposed tariffs of the US are incompatible with World Trade Organization (WTO) rules and unjustifiable on national security grounds, and added that the EU trade ministers agreed that the European Commission and member countries need to take appropriate precautions.
Meanwhile, regarding the proposed US import tariffs, Hans Jürgen Kerkhoff, president of German steel federation Wirtschaftsvereinigung Stahl (WV Stahl), stated in a press release by WV Stahl that each of the proposals currently being discussed in the US would have far-reaching negative consequences for the steel industry in Germany and Europe. According to Mr. Kerkhoff, for example, a proposed duty of 24 percent would probably completely displace German and European companies from the US market and the steel industry in Germany would be particularly affected, as the US is the most important market for the rolled steel exports of Germany, accounting for about one fifth of rolled steel exports from the EU’s largest market.
In addition, Mr. Kerkhoff pointed out that, in the case of an import quota equal to the 2017 deliveries, massive trade diversion is expected in the EU. The US-targeted import reduction of 13 million mt would largely be diverted to the open EU market, and a renewed eruption of the import crisis in the EU steel market, which has not yet been completely overcome, would be the inevitable consequence, he added. Accordingly, the WV Stahl president demanded that the European steel industry be protected from the threat of damaging diversionary effects within the framework of the WTO rules.