PARIS — Some of the United States’s closest allies are baffled and frustrated by President Trump’s decision to impose steep tariffs on U.S. imports of their steel and aluminum, and officials in the European Union, Canada and Mexico are calibrating how hard to hit back.
“The E.U. believes these unilateral US tariffs are unjustified and at odds with World Trade Organisation rules,” Jean-Claude Juncker, head of the European Commission, said Thursday. “This is protectionism, pure and simple.”
Juncker said the E.U. will introduce a settlement dispute at the World Trade Organization and announce “counterbalancing measures.”
The E.U. had previously released a 10-page list of American products that would be potential targets of retaliation, including bourbon, a specialty of Senate Majority Leader Mitch McConnell’s home state of Kentucky; cranberries, which are grown in House Speaker Paul D. Ryan’s native Wisconsin; and orange juice, which would hit the key swing state of Florida.
The U.S. tariffs — 25 percent on steel and 10 percent on aluminum — take effect at midnight Thursday. The European Commission said that specific countermeasures would come Friday.
President Trump initially announed the tariffs in March, but had temporarily exempted Canada and Mexico while they were negotiating the North American Free Trade Agreement. He had also exempted the E.U. while the United States sought to win certain concessions from Brussels, including the E.U. agreeing to a quota limiting European steel exports to the U.S. and a 10 percent decrease to current European tariffs on cars.
But the E.U. refused, repeatedly insisting that it must be permanently exempted from the new tariffs before any further negotiations could take place.
“Today is a bad day for world trade,” E.U. trade chief Cecila Malmstrom said after Thursday’s announcement that the tariffs would finally take effect. “We did everything to avoid this outcome.”
“Throughout these talks, the US has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU,” Malmstrom continued in a statement. “This is not the way we do business, and certainly not between longstanding partners, friends and allies.”
Immediately after the news broke, representatives of Europe's aluminum industry called for a strong reprisal at the WTO.
"We are very concerned that these unjustified unilateral measures put at risk the many industrial clusters, innovation hubs and transatlantic synergies we share with the U.S.," European Aluminum, an organization that advocates for the industry at the the E.U. level, said in a statement. "Even worse, we face the risk of being harmed by a redirection of aluminium from third countries that are targeted by the U.S. measures."
In the months since the tariffs were first announced, there has been some disagreement among European capitals over how best to respond.
France, in particular, has been an outspoken advocate for strong, unified pushback.
“Our U.S. friends must know that if they were to take aggressive actions against Europe, Europe would not be without reaction,” French Finance Minister Bruno Le Maire said Thursday, after unsuccessful last-minute meetings with U.S. Commerce Secretary Wilbur Ross in Paris.
In language rarely used by a French official, Le Maire also said on Thursday that the U.S. should not treat the balance of global trade like a "gunfight at the O.K. Corral.”
French President Emmanuel Macron, who unsuccessfully lobbied against both Trump's tariffs and U.S. withdrawal from the Iran nuclear deal during his official state visit to Washington last month, criticized the tariffs in a speech on Wednesday as part of a larger “nationalist retrenchment” reminiscent of Europe in the 1930s.
Macron had no immediate reaction to the White House announcement on Thursday afternoon. A spokeswoman for the Élysée Palace did not immediately return request for comment.
In contrast to France, Germany — Europe’s largest economy — has taken a milder tone since March, seeking to be a peacemaker in the negotiations, downplaying talk of retaliation and seeking to keep both sides talking.
On Thursday afternoon, German Chancellor Angela Merkel had no immediate comment on Trump's decision. But Daniel Caspary, the head of her center-right party's faction in the European Parliament, did little to hide his displeasure, writing on Twitter that Trump's move “will hurt the US, the EU and the transatlantic relationship. He should stop this nonsense.”
Germany has the most to lose among E.U. nations if the spat escalates into a full-blown trade war.
The metal tariffs on their own will not have much effect on Germany's heavily export-driven economy. Although Germany is the eighth largest source of steel imports for the United States, the U.S. market amounts to a low single-digit percentage of the overall German steel industry.
But German politicians and industry groups have said they are concerned that tit-for-tat measures could end in damaging tariffs on German automobiles, an outcome that Trump has repeatedly threatened. The administration earlier in May opened a trade investigation into vehicle imports, with the possibility it will end in tariffs on foreign cars justified by the same “national security” provision used to implement the metals tariffs.
Dieter Kempf, president of the Federation of German Industries, said in an interview aired Thursday by public broadcaster Deutschlandfunk that he predicts a “trade spiral” as a result of the tariffs. Both Europe and the United States, he said, would suffer the consequences.
“We’re anticipating that the U.S. president will follow up with further measures, and that’s what primarily worries us,” Kempf said.
“There are still a lot of debates going on in Europe,” said Guntram Wolff, director of the Bruegel Institute, a Brussels-based think tank. “There is a feeling that if we respond too strongly, this will escalate, and that would damage everyone, but Europe would damaged most of all.”
“The real worry is that we are in a weaker negotiating position,” he said.
Witte reported in Berlin. Quentin Ariès and Michael Birnbaum in Brussels and Luisa Beck in Berlin also contributed to this report.