The European Union said Thursday it’s preparing a series of trade restrictions against U.S. goods and services, in response to the tariffs on steel and aluminum that President Trump said he would be announcing next week.
Trump said Thursday he would impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports to help protect American industry.
While it’s not exactly clear what Europe and other trading partners would do in response, the EU released a statement Thursday indicating it would take immediate action, instead of filing a World Trade Organization dispute, which would take at least 15 months to litigate, and possibly much longer.
“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” said European Commission President Jean-Claude Juncker. “The EU will react firmly and commensurately to defend our interests.”
“The Commission will bring forward in the next few days a proposal for WTO-compatible countermeasures against the U.S. to rebalance the situation,” he said.
Reports over the last few weeks have said retaliation could take the form of tariffs on exports that hurt Republican states in particular, and put pressure on the GOP to get Trump to remove the tariffs. For example, tariffs or other restrictions could be imposed on exports of motorcycles made by Harley Davidson, which is headquartered in House Speaker Paul Ryan’s home state.
Kentucky bourbon has also been the subject of speculation, to hit Senate Majority Leader Mitch McConnell’s state.
“The plan seems to be, let’s go after Trump’s allies, red states, make them pay a price,” said one trade expert in Washington to wanted to remain anonymous.
While Juncker indicated immediate retaliatory steps, Cecilia Malmstrom, the EU’s commissioner for trade, said the EU would also likely start the process of bringing a WTO case against the U.S. at the same time.
“The EU will seek dispute settlement consultations with the U.S. in Geneva at the earliest opportunity,” she said. “The Commission will monitor market developments and if necessary will propose WTO-compatible safeguard action to preserve the stability of the EU market.”
Under the WTO dispute settlement process, countries can create a panel that judges whether the trade actions of a member violate its commitments. In this case, a panel would have to weigh whether the U.S. was justified for national security reasons.
But the process can take more than a year, and often can take more than two years when appeals are filed.
The first step is consultations at the WTO, which must run for two months before the EU could request a dispute settlement panel. Other countries affected by the U.S. tariffs could also decide to join the EU action.
