EU makes last-minute attempt to avert US trade war

The EU is making a last-ditch effort to avoid a trade war with just hours to go before tariffs on European steel and aluminium exports to the US are due to come into force.

Cecilia Malmström, the European commissioner for trade, is due to speak to the US commerce secretary, Wilbur Ross, later on Monday, but EU sources said they fear the White House is set to continue to make impossible demands.

Theresa May, Emmanuel Macron and Angela Merkel spoke by phone on Sunday to agree that the EU would hit back in response to the imposition of tariffs on European traders.

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Merkel said Europe was “resolved to defend its interests within the multilateral trade framework”.

A Downing Street spokesman said the leaders had spoken of “the vital importance of our steel and aluminium industries and their concern about the impact of US tariffs” and “pledged to continue to work closely with the rest of the EU and the US administration with the aim of a permanent exemption from US tariffs”.

The US administration imposed import tariffs of 25% on steel and 10% on aluminium in March on the grounds of national security.

The EU, along with Australia, Argentina, Brazil, Canada, Mexico and South Korea, were granted a temporary reprieve, due to come to an end on 1 May.

The main focus of the import tariffs is China, with whom the US has a $502tn (£365tn) trade deficit. However Donald Trump has been scathing about the current terms of trade with Europe.

The EU, in response, has insisted that it will only discuss terms of trade with the US once it has received a permanent and unconditional exemption to the steel and aluminium tariffs. Trump has reportedly expressed his irritation that he cannot negotiate bilaterally with the key member states, rather than work through the EU institutions.

In their last phone call, Ross was rebuffed by Malmström after he demanded that the EU voluntarily limit exports of steel and aluminium to 90% of the average 2016/17 level, reducing European imports by 16.3%.

Speaking on Sunday in Abu Dhabi to Bloomberg TV, the Austrian chancellor, Sebastian Kurz, said a trade war would be “extremely negative” for both sides.

He said: “I admit, I am concerned that there could be some new trade barriers. If it comes to that, I hope that we as the EU can come to agreement very quickly on a common and clear position.

“I hope that this won’t unleash any negative spiral that leads to a trade war and that, rather, the US will reconsider its ideas about trade barriers.”

In Australia, the foreign minister, Julie Bishop, said she was also pushing for a permanent exemption.

“The prime minister and other ministers have been relentless in our advocacy for Australia and we will continue to ensure that we receive that exemption,” Bishop said.