Clarity is the mot du jour in Brussels, with so little of it forthcoming from Washington DC on the subject of trade and tariffs.
European Commission officials have been trying – so far in vain – to understand whether proposed US tariffs on steel and aluminium will end up impacting member states.
Last week, the European commissioner for trade, Cecilia Malmstrom, repeatedly insisted that she did not buy the American pretext that the tariffs aimed to protect the national security of the US.
She said the European Commission would take its case to the World Trade Organisation and push to have any US measures reversed. Malmstrom also told me that Trump’s position was “politically hard to understand, and also legally hard to make the case”.
After a long-scheduled weekend meeting with US trade representative Robert Lighthizer, Malmstrom used another bit of neat diplomatese — she described her discussions with Lighthizer as “frank”.
Translation: far from cordial.
And that should come as no surprise, after the Trump administration very suddenly signed off on tariffs of 25 per cent on steel and 10 per cent on aluminium. This move not only alarmed financial markets in the short term, but may leave more lasting damage by upending the tradition of well-choreographed conversations on trade that have characterised US-Europe relations for the past decade.
So far, the US government has not even been able to give its trading partners, including Europe, a set of guidelines that would allow them to win exemption. And when Donald Trump tweeted on Monday that his commerce secretary Wilbur Ross would be meeting with EU representatives soon, Commission officials minutes later said they had no idea what he was talking about.
Malmstrom addressed a trade forum on Monday with a thinly-veiled reference to the current incumbent of the White House, insisting that Europe would “stand up to bullies” and would not be intimidated by threats.
The EU says it is not prepared to open new trade negotiations in order to gain exemption for the tariffs, and one Brussels think tank director told me that making any such concessions would mean giving in to blackmail.
Dutch finance minister Wopke Hoekstra told me that Trump’s tariffs were a bad idea for citizens and workers on both sides of the Atlantic, while France’s Bruno Le Maire said that “protectionism was a dead end”, urging EU members to respond firmly as a united bloc.
Meanwhile, Germany’s new economy minister, Peter Altmeier, hoped the situation would soon deescalate, and was keen to emphasise that the European response remains solely on paper at this stage.
However hypothetical the proposals are from either side, industry and businesses remain understandably concerned.
The American brand at the centre of the current spat, Harley Davidson, sells thousands of motorbikes a year across Europe, and would struggle if targeted tariffs against its US-manufactured products were introduced. One Harley dealer in Belgium acknowledged that his sales would take a sizeable hit if the already steep asking prices (some larger “hogs” retail for more than €50,000) were pumped up a further 25 per cent.
Meanwhile, the European Steel Association told me that there could already be some damage to producers across the continent, with shipped steel diverted from the US to European ports in advance of fresh tariffs, and the potential for this to drive down local prices.