Donald Trump has exempted Australia from the steel and aluminium trade tariffs. But not the EU.
25% tariffs on steel and 10% on aluminium now apply against the EU.
The US and the EU strain increases, setting off arguments before the World Trade Organisation (WTO).
The day before Trump’s decision, in an interview with Bloomberg Politics, Austrian Chancellor, Sebastian Kurz said,
‘I hope that we as the EU can come to agreement very quickly on a common and clear position. I hope that this won’t unleash any negative spiral that leads to a trade war and that, rather, the US will reconsider its ideas about trade barriers.’
Leaders of Germany, France and Britain agreed in a joint phone call the EU ‘should defend its 28 member states from any punitive U.S. tariffs based on international multilateral rules.’
French President, Emmanuel Macron arrived in Sydney on Tuesday to meet with Malcolm Turnbull.
The Sydney Morning Herald reported the two talked about a free trade agreement proposed by Turnbull last week in Berlin. German Chancellor, Angela Merkel has already given her full support.
That’s not the only response on the table. The Sydney Morning Herald reported talks between Macron, Merkel and British Prime Minister, Theresa May. Agreeing to consider ‘trade retaliation’ against the new US tariffs.
The Sydney Morning Herald also said Macron and Turnbull explored the possibility of increasing security relations between Australia and France. This would strengthen industrial defence ties between them, based on shared concerns about China’s increasing strategic interests in the south Pacific.
Australia has an advantage here. There’s an opportunity for future trade and security agreements with the rest of the EU.
Only time — and the unpredictability of a possible trade war between the US and EU — will tell.