U.S. President Donald Trump had granted EU producers an exemption from tariffs of 25 percent on steel and 10 percent on aluminium, pending the outcome of talks. The exemption ends June 1.

EU leaders last week agreed on four areas the bloc was willing to discuss, including easier access for industrial products, but only if the exemption is made permanent.

EU Trade Commissioner Cecilia Malmstrom spoke with U.S. Commerce Secretary Wilbur Ross after the proposals were made public, but said Washington did not seem satisfied.

“I think they don’t think it is enough,” she told reporters before a meeting of EU ministers to discuss trade.

She later told a news conference she was “not sure, frankly” and that, even if European producers escaped tariffs, they were unlikely to have unrestricted access to U.S. markets.

“There have been signals from the U.S. that the exemptions will not be prolonged, so either they will be imposed on us on June 1 or there will be other sorts of limiting measures,” she said.

So far, the United States has given permanent metals tariff exemptions to Australia, Argentina, Brazil and South Korea, but in each case set import quotas.

Malmstrom said she could not imagine the EU accepting quotas unless they were at levels of exports in recent years.

Luxembourg Foreign Minister Jean Asselborn also downplayed the chances of a breakthrough, saying one could not force a third party to be reasonable.

“I think that on June 1 we will have another deadlock,” he said. “Perhaps we will take a step forward in terms of what we can offer the Americans. It could be that we move towards quotas. Everything is open, but it’s difficult.”

The areas identified for discussion are: greater market access for industrial products, including cars, and to government tenders; energy, notably liquefied natural gas; possible cooperation among regulators; and reform of the World Trade Organization.

Export-oriented Germany, which has been the keenest to avoid a trade conflict, described the EU leaders’ proposals as a first step and forecast intensive contact with Washington in the next nine days to find a deal acceptable to both sides.

“Whether the result will be positive, no one can say, but we lose if we don’t at least try,” German Economy Minister Peter Altmaier said. “I remain optimistic that a solution can be found if both sides are interested in it and if both sides are prepared to move in the right direction.”

REUTERS

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