The EU is prepared with harsh measures if the US starts a trade war in the field of steel

A „nuclear option” of trade defense is being discussed to prevent dumped steel imports into Britain, and the EU could be engaged if the United States starts a steel trade war.

It is believed that the European Commission is analyzing measures that have not been used for 14 years if President Trump‘s investigation finds that steel imports endanger America’s national security by harming domestic producers.

Section 232

A report is expected at any time on the „Section 232” investigation. Which could allow the US to block steel from foreign producers. Mainly targeting the Chinese steel mills subsidized by the Beijing government. To penetrate the US market by imposing huge trade tariffs.

President Trump is afraid that US steel producers could close their businesses because they would not be able to compete, a fact that damages the American industry.

However, the tariffs imposed by Section 232 could eliminate all imports, increasing the pressure on the UK steel industry, with exports to the US representing 9% of British steel production, worth around £350 million a year.

With the closure of the American market, production in China is likely to be diverted to Great Britain and Europe. Thus causing an additional tension on the companies already under pressure. Which is still recovering after the steel crisis. And which meant the loss of thousands of jobs in the last two years.

Trade defenses considered to be examined by the EC are known as „safeguards”. These could be introduced quickly, imposing high tariffs on imports in just a few weeks. Instead of a few months as it would normally take. Also, it does not require long-term EC investigations. And evidence of damages that could delay the rescue of businesses from collapse.

A trade war in the field of US steel – the blow for Europe

The EU Commissioner for Trade, Cecilia Malmstroem, said that „preparations are being made” to respond in case the US introduces new tariffs. Adding that the indications are that such measures would mean that the EU would be „hit unjustly”.

Ian Rodgers, former chief executive of British industry, said the safeguards were last used in 2003.

An EC spokesman refused to reveal what measures are being developed to protect European industry. He said that it is „too early to talk about a specific response” because the US has not yet taken measures.

Article source: http://www.telegraph.co.uk/business/2017/06/26/brussels-ready-nuclear-option-tough-tariffs-us-sparks-trade/