U.K. Trade Chief Says Trump Tariffs Upsetting Allies, Not China

(Bloomberg) -- U.K. Trade Secretary Liam Fox said he urged U.S. officials to reconsider imposing steel and aluminum tariffs on the European Union this week, suggesting the move has upset America's allies more than the main culprit for overcapacity, China.

The EU and other foreign trading partners are seeking exemptions to the 25 percent tariffs on imported steel and 10 percent on aluminum that President Donald Trump announced this month. Trump justified the tariffs by invoking Section 232 of a 1960s trade law, which allows the president to unilaterally impose sanctions if imports are found to be a threat to national security. The tariffs will take effect on March 23.

The 232 national-security investigation into steel and aluminum produced an “odd result” because China “isn't that upset” but some of America's closest military allies are, Fox said at an event hosted by the BritishAmerican Business group and Thomson Reuters in New York on Friday. The 232 rule may not be the “right instrument,” he said.

Fox met with Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and a group of bipartisan lawmakers on the U.S. House Ways and Means Committee, which oversee issues related to trade, on Wednesday and Thursday in Washington.

The British trade chief said he delivered the message that the EU isn't the problem. By itself, the U.K. accounts for just 1 percent of U.S. steel imports and some of that is used for American defense purposes, he said. To apply the tariff on those imports seems a “trifle strange.”

No Bullies

EU Trade Commissioner Cecilia Malmstrom has also been speaking with U.S. officials to secure an exemption on the grounds the bloc is a close ally to the U.S. She has vowed to “stand up to bullies.”

The U.S. and EU have complained for years that Chinese steel producers unfairly benefit from state subsidies, and dump their products on the world market. Fox urged a multilateral approach to addressing the over-capacity issue.

China will take “strong” measures to protect its own interests, the Ministry of Commerce said in response Trump's tariffs announcement. “China urges the U.S. to respect the authority of the multilateral trade system, and repeal the measures as soon as possible,” it said.

To contact the reporter on this story: Sarah McGregor in Washington at smcgregor5@bloomberg.net.

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Sarah McGregor

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