EU vows retaliation if Trump imposes tariffs on steel, aluminum

CGTN Europe

CGTN Europe spoke to Allie Renison spoke to Director, SEC Newgate and former government trade adviser

Transcript

00:00Let's talk to Ali Renison, the director of the global communications company SEC Newgate

00:06and a former trade advisor to the UK government. Ali, welcome, good to see you. Do you think this

00:11is all just a negotiating ploy from the Trump administration and in a month's time we'll be

00:16talking about very different figures? I mean I think it depends on what the area is. For steel

00:22and aluminium we've seen this happen before effectively. This is version two. So this is

00:28not the first merry-go-round on steel and aluminium. I think when you're looking at

00:32some of the other sort of extractions of leverage that Trump is trying to get,

00:37there's more foreign policy issues on border security, on migration. So I think it depends

00:41on the types of tariffs but we know that he's long had an issue with the amount of

00:45steel that he thinks and some manufacturing lobbies think is being dumped in the US market.

00:50So just how significant will the impact of US tariffs be on European businesses and

00:54which sectors, you mentioned steel, which other sectors are likely to be hit the hardest?

01:01Well I think it depends on the response effectively because at the moment we know

01:04that steel and aluminium are the kind of the aluminum sectors where the EU produces a lot

01:09of these commodities to send to the US and as a competitor effectively are a big issue.

01:13I think the retaliation that the EU might take is what might affect what sectors are really

01:18kind of hit. Obviously there are manufacturing industries that import from the European Union,

01:24they process it, they kind of they use it in their assembly but if you're looking at what

01:28the EU might do to retaliate then there's a possibility that we'll start seeing retaliatory

01:32tariffs on areas like whiskeys, on cars and suddenly the scope of that trade war becomes

01:36much bigger. The UK is outside the EU post Brexit, where does this leave the UK? Could

01:44these tariffs perhaps have a knock-on effect for the UK given our close ties with Europe?

01:50Yeah, I mean the UK's had a very, the government's had a very heads-down approach right now in terms

01:55of how it tries to engage with the US. You know it's a much smaller share of UK exports

02:00in steel and aluminium that are going to the US market. Having said that, the level of our

02:04integration with European supply chains and there's a lot of steel traded between the UK

02:09and the EU, we are a big sort of intermediate market for some of that, that potentially has

02:13a knock-on effect on raising the costs and prices for businesses and therefore for consumers being

02:19passed along those tariff cost heights. Realistically what options does the EU have

02:25to respond to these US tariffs? Well you can do retaliatory tariffs, there are sort of broader

02:32trade defence measures, they've strengthened their arsenal, which basically means that there are other

02:38tools in the toolbox to try and basically cut off some of US access to the European market

02:43and some of it may not be immediate actually, some of it may be if you're looking at sort of

02:47the divergences in AI, we've heard EU leaders talk about making it harder for Elon Musk's

02:52sort of social media platform to operate in those markets. So there's a lot of different ways in

02:56which we can respond that aren't just trade specific. In a previous life you were a former

03:00trade advisor to the UK government, if you were back in one of your old jobs what would you be

03:06telling these governments? I mean how should Europe prepare for potential long-term disruptions to

03:13transatlantic trade? Diversify, diversify, diversify and I do not mean by the state and

03:20sort of the government forcing companies to relocate sort of you know anything out of the US,

03:24but I think that now is the time for the trade agreements that were stalled between the EU and

03:28the UK and countries like Canada, they need to be revived, they need to be looking at sort of

03:32alternative markets to do effective deals with, it's all about the and not just the or.

03:38Ali, good to talk to you. Ali Renison, the director of the global communications company

03:42SEC Newgate, former trade advisor to the UK government.

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