France Says EU Will Retaliate If US Threatens Its Industries


(Bloomberg) — The European Union has tools that it can turn to if Donald Trump makes excessive threats to strategic industries such as steel, French Trade Minister Nicolas Forissier said.

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The US president said on Friday he planned to increase levies on imports of EU cars and trucks to 25% this week because he considers the bloc isn’t complying with a trade deal struck in July.

EU officials have said all options will be on the table if Trump follows through with the threat as the two sides work to implement the agreement.

“We will use our tools, especially if there are too many threats on our economy or on our industrial, strategic interests — for example, I am thinking of steel — so we will no longer be naive,” Forissier said in an interview with Bloomberg Television on Tuesday.

The French minister will meet with US Trade Representative Jamieson Greer later Tuesday for talks before hosting counterparts from the Group of Seven on Wednesday in Paris.

European lawmakers will meet Wednesday with the other EU institutions — the European Commission and the European Council — to finalize legislation to implement the trade agreement with the US. Bernd Lange, who chairs the European Parliament’s trade committee, said they intend to implement the accord in June.

Under the deal – which was signed in July — the EU agreed to erase levies on US industrial goods in exchange for a 15% tariff ceiling on most EU products. The US has implemented certain provisions of the deal.

But EU officials say the US hasn’t complied with other parts, pointing to the fact that Washington widened a 50% tariff on European steel and aluminum in August to include hundreds of new products.

“We are now in the final stages of implementing the remaining tariff commitments,” Commission President Ursula von der Leyen told reporters Tuesday in Armenia. “At the same time, the US has the commitment, for example, where alignment with the agreed ceiling is still outstanding.”

The spike in tensions over possible car tariffs is overshadowing France’s efforts to move forward on other elements of the G-7 agenda, including discussing how to respond to Chinese over-capacities.

The group is also seeking more coordination on diversifying supply of critical minerals away from China, as well as collaborating on the challenges of digital trade.

Even before Trump’s latest threats, the EU was unhappy with the US tariffs on steel and aluminum products despite Washington’s recent revisions as nearly half of the EU exports using these metals would end up having higher duties.

Although both sides agreed to continue talks to address this long-standing irritant since the agreement was reached, the commission told EU envoys last week that it’s ready to respond if necessary.

The July agreement between the US and the EU is in the process of being ratified, Forissier said. Trump’s latest threats create more uncertainty for businesses and economies, he added.

“It’s moving at the normal pace,” he said. “We will implement what was in the deal. The announcement by President Trump doesn’t help.”

–With assistance from Caroline Connan, William Horobin, Andrea Palasciano and Katharina Rosskopf.

(Updates with EU comment in the ninth paragraph.)

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