Once again, the US has begun a trade war, this time with the European Union. US President Donald Trump's decision to impose duties on European aluminum and steel has caused the EU to retaliate with import tariffs on US jeans, motor bikes and other products. While the UK was reluctant to back the EU retaliation, the European Commission said it had the full support of all 28 member states to act.
The EU is finalising the list it will submit to the World Trade Organization (WTO) but the bloc aims to introduce "rebalancing" tariffs on about €2.8 billion worth of US steel as well as industrial and agricultural products, including bourbon, peanut butter, cranberries and orange juice.
The EU has also taken a complaint to the WTO. Should the case still be ongoing after three years, the EU plans to impose further tariffs of €3.6 billion on US products. Trump brought in tariffs of 25% on EU steel imports and 10% on imported aluminum on 1 June, citing "national security" interests.
After a meeting of senior EU officials, the European Commission vice-president Maros Sefcovic said, "The new duties start applying in July. It is a measured and proportionate response to the unilateral and illegal decision taken by the United States."
The UK has been cautious in backing the EU's retaliatory measures in public as the UK is likely to be handed an exemption from the US tariffs once the country has left the EU. German Chancellor Angela Merkel voiced regret about President Donald Trump's abrupt decision to withdraw support for a Group of Seven communique. "The withdrawal, so to speak, via tweet is of course … sobering and a bit depressing," Merkel said following the G7 summit in Canada. "It's hard, it's depressing this time, but that's not the end" of the Group of Seven, she added.
"It means that we as Europe have to stand up for our principles, potentially together with Japan and Canada," Merkel said of Trump pushing away the other members of the G7.
Merkel said she will keep talking with Trump., but renewed her call for Europe to take a more forceful role in global affairs and said the European Union won't be "taken for a ride" in its trade conflict with the US. The G7 meeting collapsed in farce as Trump left early to meet North Korean leader Kim Jong-un for a summit in Singapore, refusing to sign a communique produced by the group. After a failure to get Trump to budge on the tariffs he placed against America's G7 allies, Justin Trudeau held a press conference in which he vowed retaliatory action.
"Canadians are polite and reasonable but we will also not be pushed around," Trudeau said.
And he said he had told Trump that "it would be with regret but it would be with absolute clarity and firmness that we move forward with retaliatory measures on July 1, applying equivalent tariffs to the ones that the Americans have unjustly applied to us."
Trump responded on Twitter: "Based on Justin's false statements at his news conference, and the fact that Canada is charging massive tariffs to our US farmers, workers and companies, I have instructed our US Reps not to endorse the Communique as we look at tariffs on automobiles flooding the US market!"
He added: "PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, "US tariffs were kind of insulting" and he "will not be pushed around." "Very dishonest & weak. Our tariffs are in response to his of 270% on dairy!"
Merkel responded to the tweet, saying: "I don't think that inflammatory language makes things better. Sometimes it seems the American president thinks that only one side wins and everyone else loses."