Euro-Japanese and other brewing measures to fight back US Steel Aluminium tariff

Release time：Jun 28, 2019 From：admin

In response to the tariff imposed by the United States on imported steel and aluminium products, the European Union, Japan and other regions and countries have recently formulated response measures, prepared to fight back at the level of the World Trade Organization (WTO), and stressed the importance of strengthening regional cooperation to resist the threat of trade protection.

Japan and EU intend to respond fiercely

According to the Japan Release Association (NHK) on the 17th, the Japanese government is making a final arrangement to formally inform the World Trade Organization that it is ready to retaliate on US tariff measures.

According to NHK, Japan is considering imposing tariffs on US exports worth $409 million, which are comparable to the US tariffs, but does not disclose specific product categories.

US President Trump announced this year that he would impose 25% and 10% tariffs on imported steel and aluminium products on the grounds of national security. Japan has not been exempted from steel and aluminium tariffs like some US allies.

Although Japanese Prime Minister Shinzo Abe visited the United States some time ago to seek deeper cooperation in the field of trade, the effect was not good. At present, Japan is also shifting its focus to regional cooperation.

According to Kyodo News Agency (Kyodo News Agency) on July 17, the "Japan-Korea Economic Persons Conference" held in Tokyo by top Japanese and Korean enterprises ended its two-day agenda on June 16. Considering the US-China trade issue, the joint statement adopted at the meeting stressed the need to prevent the rise of protectionism that presents a trade war situation. In order to realize the wide-area economic circle in Asia through FTA, the statement proposes to cooperate at the non-governmental level.

"We are committed to developing future-oriented cooperation with each other," Sasaki Kanfu, president of the Japan-Korea Economic Association and special adviser to Mitsubishi Business, said at a press conference. It is important to conclude a high-quality agreement at an early date and look forward to progress in the FTA negotiations between China, Japan and South Korea.

In addition to Japan, the EU, which enjoys temporary exemptions from import tariffs on steel and aluminium, will also strengthen regional solidarity. EU leaders held a summit on June 16, and it has been clear that they will not hold tariff negotiations under the circumstances of "shooting the gun at the head".

Tusk, President of the European Council, said on the 16th that the unity of the European Union is the key. "If we are to discuss trade liberalization with the United States, it means that the United States will grant us a permanent exemption from steel and aluminium tariffs."

"The EU and the United States are friends and partners. Therefore, American tariffs are unreasonable on the basis of national security, and the idea that the EU will pose a threat to the United States is even more absurd.

According to EU sources quoted, EU leaders reached an agreement after the dinner meeting that they could negotiate with the United States on deepening cooperation on LNG in exchange for a permanent exemption.

Worries still spread

The unreasonable tariff imposed by the United States is still expanding, causing concern from all walks of life.

Trump has reportedly proposed a 20% tariff on imported cars and a stricter emission standard for imported cars than for domestic ones.

The U.S. Automobile Research Center said the proposal could subject 25% to 87% of car sales in the United States to new tariffs, with a price increase of $470 to $2200 per car.

In response, the parties have recently become more concerned about the threat of US tariffs and the economic downturn caused by trade frictions.

South Korea has asked the United States to negotiate unreasonable import tariffs. The World Trade Organization (WTO) confirmed on June 16 that South Korea has filed a request for consultation at the WTO on US safeguard tariffs on imported washing machines and photovoltaic cells.

Relevant documents show that the ROK believes that the United States plans to implement safeguard measures on the grounds of "serious damage or threat of serious damage" to its industry, but does not give a reasonable explanation on how to reach this conclusion. The ROK accused the United States of imposing safeguard tariffs in violation of the WTO Agreement on Safeguards and other relevant provisions.

The request for consultation is the first link in the WTO dispute settlement mechanism. If the consultation fails to reach a satisfactory result within 60 days, Korea may request the WTO to set up an expert group to hear the case.

In January this year, the United States announced that it would impose safeguard tariffs on imported washing machines and photovoltaic cells and components, which aroused strong dissatisfaction from the ROK.

Major U.S. trading partners are also concerned about the impact of U.S. tariffs. Tis Petersen, an economist at the Bertelsmann Foundation in Germany, said the German government might cut its economic growth expectations because of the threat of punitive tariffs from the US government.

Last week, the European Central Bank issued a communique saying that the tariff measures recently announced by the United States pose a threat to global economic growth, and the risk of rising protectionism will affect investment decisions and may have a greater impact on global economic activities.

In this communique, the European Central Bank focuses on the possible harm to the global economy caused by protectionist measures taken by the United States.

The communique said that a significant escalation of trade tensions could undermine global trade activities and the process of sustained economic recovery. If the United States raises import tariffs substantially against all trading partners, and the trading partners implement corresponding retaliatory measures, then Global trade activities will decline, and the United States may be particularly seriously affected. Rising import prices will increase production costs and reduce household purchasing power, thus affecting consumption, investment and employment. In addition, economic uncertainty will exacerbate global financial market turmoil.

Working together to fight protectionism

Zhang Xiangchen, Permanent Representative of China to the World Trade Organization, pointed out at the WTO General Council meeting held in Geneva last week that the recent U.S. steel and aluminium tariff measures based on Clause 232 were not based on "countries".