US president Trump has given the EU, Canada and Mexico a temporary stay on the introduction of new tariffs on steel and aluminium.
In a move just hours before new tariffs were due to take effect today (1 May), the White House said the reprieve would last till 1 June while agreements had been reached for permanent exemptions for Argentina, Australia and Brazil.
Go deeper with GlobalData
According to Reuters, the European Commission said the decision not to impose tariffs on the European Union for now prolonged business uncertainty and the EU should get a permanent exemption.
The commission, which coordinates trade policy for the 28 EU members, acknowledged Trump's decision but said the EU should be permanently exempted from the tariffs since it was not the cause of overcapacity in steel and aluminium.
Germany, under fire from Trump over its trade surplus with the US, said it also expected a permanent exemption with neither side having an interest in escalating trade tensions, Reuters reported.
Trump had invoked a 1962 trade law to establish protection for US steel and aluminium producers on national security grounds amid a worldwide surplus of both metals that is largely blamed on excess production in China, the report noted.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataEU business federation BusinessEurope reportedly called the extended respite positive, but said that companies needed predictability.
Germany's DIHK Chambers of Commerce and Industry said the delay offered an opportunity to defuse the trade conflict.
Britain's trade minister Liam Fox told Reuters he was delighted Trump had decided to extend the temporary exemption, saying hitting British imports made no sense.
According to Reuters, European steel association Eurofer said the US decision was welcome, although temporary, but said it was concerned a surge in imports already seen in the past few months could increase as countries redirected exports to the open EU market.
The European Union had consistently shown it was willing to discuss concerns about the openness of each other's markets, but would not negotiate under threat, the Commission said.
"Any future transatlantic work programme has to be balanced and mutually beneficial."
EU Trade Commissioner Cecilia Malmstrom would continue discussions with U.S counterparts, Commerce Secretary Wilbur Ross and Trade Representative Robert Lighthizer, the Commission said in the statement cited by Reuters.
In an expected tit-for-tat response, the commission has said the EU would set duties on US exports, including peanut butter and denim jeans, if its EUR6.4bn metals exports to the US become subject to tariffs. Economists have said the stand-off could led to a trade war if Trump responds with further tariffs, such as on EU cars, Reuters noted.
Trump has criticised EU import duty of 10% on cars, versus the US levy of 2.5%. In turn, the EU said the US puts a higher tariff on trucks that it does.
