February 11, 2025 • 13 mins
The EU says it’s ready to retaliate to US tariffs on steel and aluminium imports. But the UK is pursuing a different strategy, seeking to avoid the levies altogether. We discuss the diverging strategies with our Brussels Bureau Chief Kevin Whitelaw. Hosted by Yuan Potts and Stephen Carroll.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio News.
Speaker 2 (00:08):
We are currently assessing the scope of the measures announced
overnight and we'll be responding infirm and a proportionate way
by countermeasures. We will act to safeguard our economic interests.
We will protect our workers, businesses and consumers.
Speaker 1 (00:26):
So that's how the European Union plans to respond to
Donald Trump's latest tariffs. That's from the Trade Commissioner maush Chefshovich.
There will the UK take the same approach. Hello, you're
listening to Bloomberg UK Politics. I'm Stephen Carroll and I'm
you and bots. Welcome to the program.
Speaker 3 (00:41):
Now, Steven ought to start the show with a rather
surprising fact. It's just three weeks since Donald Trump became
US president. Is that I had to double check this.
I thought it must be three months or so. But
the pace of change and the volume of announcements has
just been really quite something. But it's the President's utterings
on trade and tarent I've sort of really got the
atension of economists and investors. Trump says he plans twenty
(01:04):
five percent levees now on all imports of steel aluminium.
That's the latest one kicking in from next month, and
just this morning the EU's said it will respond with
firm and proportionate countermeasures. Commissioned President sul the underline, saying
that she deeply regrets the US levees, calling them unjustified,
and German chances that Olaf Schortz says that the EU
(01:25):
has the strength to respond to Trump's trade measures, but
Steve when it comes to the UK is looking like
Kirstama's government is pursuing altogether different playbook.
Speaker 1 (01:35):
Look, the UK is trying to avoid tariffs altogether, a
reasonably good plan, one would think. Bloomberg reporting, citing sources
saying the country doesn't want to escalate a trade war
by imposing retaliatory measures. Pinseecuty David Lammy saying over the
weekend the UK is an open, free market society that
doesn't believe in tariffs in either direction. Now, if this
(01:55):
gam but fails, though, UK Steel says American tariffs would
be a devastating bloe to the industry. The UK exports
around two hundred thousand tons of steely ear to the US,
which is about a third of what Germany exports. It's
less than what the Netherlands or Belgium individually export either
a little bit more than France or Spain, but nonetheless
quite a large amount of steel being exported from the UK.
(02:20):
So different responses from the UK and from the EU
at the time when the UK at least is trying
to mand relations with the European Union, so as Britain
and its closest neighbors being pulled in opposite directions by
Donald Trump.
Speaker 3 (02:33):
Yes, possibly an interesting divergence. Well, let's get more with
our Brussels bureau chief Kevin Whitelaw, who covered the previous
Trump administration in Washington for Bloomberg. O. Kevin, let's just
start off with what happened today. What exactly has the
EU announced when it comes to tariffs.
Speaker 4 (02:49):
Well, they haven't announced much other than they're very unhappy
with the move by the Trump administration and that they'll
have countermeasures ready assuming that this goes ahead as announced,
and so the date is March twelfth, as to win,
these are set to come in. And so obviously the
question not just in the EU but around the world
is this a negotiation or is this athetic complay? And
(03:11):
I think every country is now going to be reaching
out to the Trump administration trying to figure out all right, well,
what exactly are you looking for? Is the room to
talk about this? How do we avoid this kind of
attacktics rupt?
Speaker 1 (03:22):
Well, can you take us on a journey to the past,
if you will, to borrow a phrase in a Disney film,
to the last time around that we all experience this.
Because steel tariff's were something that Donald Trump also imposed
the last time that he was president, there was a
response to us, what does that tell us about what
the EU might do this time around?
Speaker 4 (03:41):
Yeah, well, there was a response, and the countries did,
in many cases work to try to negotiate ways around it.
For Canada and Mexico in particular, that meant negotiating quotas
that could come in without tarras. There was a little
bit of that from the EU side as well, but
for the most part, with the EU did was slap
on various kinds of retaliate retaliatory trade measured, including tariffs
(04:06):
on some very symbolic American products like Harley Davidson motorcycles,
they very beans, bourbon, that kind of thing. And in fact,
the Biden administration had basically just agreed to a truce
with the EU so that those measures were simply suspended.
That suspension comes up at the end of March, and
(04:28):
so the EU had already been facing a decision about
whether or not to extend that or to have those
snap back. So that's obviously one sort of tool that
they have in their immediate toolboxes. They look forward to
this next one. But you know, obviously we know that
more broadly, there's been a plan on the EU side
that has involved making several different lists of some possible
(04:50):
ways to retaliate against US tariffs, just sort of based
on whether you know, the extent of and breadth and
depth of whatever Trump decided to move ahead with. So
they'll also we'll be looking to see do they want
to impose the kind of penalties that are aimed to
begin a conversation i e. To begin a negotiations so
not too strong, or do they really want to try
(05:12):
to inflict some actual market pain and seek to deter
Trump from doing this in the future.
Speaker 3 (05:17):
So Kevin some pretty tough words out of Brussels today,
but it's not true that the twenty seven member states
are entirely united. Are then their view towards Donald Trump?
Some EU leaders are quite pro and many of them
can't stand the man and there's not entire union minity
over how to deal with this, is there?
Speaker 4 (05:37):
No, that's right, and obviously prey it is bort of
a broad Bruckle competence, and so you are in theory
going to see the Commission taking the lead on it.
But there definitely is the potential for individual country to
try to cut individual deal, and it's also very likely
that Trump may try to indeed exploit them they try
to make that happen as he tries to fracture a
little bit of the block's unity. But you know, at
(05:59):
least when it comes to the sort of metal tariff
that are they said going to hit probably Germany the
hardest there is, at least from that side, I think
still a fair amount of interest in trying to respond
in a unified way. But you know, they are taking
a certain amount of solace in the notes in that
Canada and Mexico have been able to at least come
to some early negotiations and stave off at least for
(06:23):
a time from some threatened tariffs, and so I do
think that they'll be watching closely as those negotiations continue,
as well as how China in the US end up
approaching the issue. As they go forward.
Speaker 1 (06:35):
So Kevin, does that tell us then that the UK
code manage to you know, escape these tariffs and take
a different approach and play this in a different way.
Speaker 4 (06:45):
I mean, it definitely does. I think everyone's going to
be doing this. We've already watched the Australians begin their
conversations with Trump over this, and it's very very likely
the UK will they have that flexibility obviously now post brexit,
to be able to cut their own deal without any
particular ramifications. But you know, they'll also be looking towards
(07:05):
the EU side and wanting to make sure that they're
preserving the relations with Brussels. So I think right now
what the UK has going forward is that Trump seems
to kind of like the Prime Minister and has had
pretty warm words procure Starmer up to now, and so
I do think that at least this time around, London
may not be in his immediate target zone. Yeah.
Speaker 3 (07:27):
And conversely, it'll be fair to say that Donald Trump
is not very keen on the European Union, calling the
trade relationship an atrocity recently, but he's got a long
standing kind of history of disagreements with the Brussels.
Speaker 4 (07:42):
Hasn't he Yes, I mean this has gone back away,
as he's talked several times throughout the campaign, not to
mention his first term, but you know several times in
the campaign and even after becoming president that Europe reached
the US unfairly. He called it netrocyty. He talked, as
you said, about tech policy. We had Vice President j
d Vance in Paris today at the Artificial Intelligence summit,
(08:06):
and you know there he also took on the block's
approach to tech. So I do think that you see
a number of different areas both in the trade zone
but also in sort of the broader regulatory approach where
there is a natural natural problem.
Speaker 1 (08:26):
Now the UK and ministers in the government here have
been very careful not to defend Donald Trump since he
became president, and have been very careful in their language
and reacting to the various steps that he's taken. The
UK's new ambassador to the US, Peter Mandelson, has been
trying to smooth things over in the special relationship, talking
about having to respect and understand what drives Trump and
(08:46):
his decision. Now, he'd previously been quite critical, so it's
a bit of a bit of a turnaround. For Peter Mandleson,
is that sort of language going to win over Donald
Trump and perhaps play favorably.
Speaker 4 (08:59):
I mean, it can't hurt, and it is interesting. There's
a number of different leaders, as you say, both in
the UK but also elsewhere, who have taken great pains
to try to compliment him, to flatter him, to appeal
to him in various ways. It feels it seems super transparent,
but it does sometimes seem to work. We've watched the
(09:20):
NATO chief Mark Rita do this several times, talking a
lot about what Trump has done on defense spending and
trying to credit him with a number of things that
basically those were happening already. So I do think that
there's always that potential. But ultimately, you know Trump, he
does like to win, he does like to be seen
(09:41):
getting things, and I think there's always that slight risk
that at some point the UK is going to do
something that intentionally or otherwise is going to put itself
potentially right in Donald Trump's target zone. And that's where,
you know, that's where all of that work could get
undone really quite quickly.
Speaker 3 (10:00):
Yeah, and the UK obviously has a has a good
chance to diverge from the from the EU here perhaps
you know, getting getting off US tariffs if they if
they can win Donald Trump round. But there are risks
to this, aren't they. In as far as the UK
is also trying to build a better relationship with the EU,
and potentially this could go down quite badly in Brussels, right,
(10:21):
you know.
Speaker 4 (10:21):
I think it depends as to who's you know, as
to who's expensive any deal comes at. Right, So if
they're able to cut their own deal and it doesn't
affect the relationship with the EU directly, there there may
not be resentment in particular, there may not be an
immediate backlash, but at some point London is probably not
gonna be able to have it both ways, and so
there has been this conversation about a UK EU reset.
(10:43):
I think Brussels is frankly still trying to figure out
what that what what the new UK government means by that,
and it's possible Dummer himself is still trying to figure
that out. But obviously if that gets serious, that that
becomes something much bigger than that has the risk of
starting to you know, put put the UK back in
(11:04):
sort of the EU camp. As far as as far
as Donald Trump is concerned, you know, but obviously the
UK also has to think about where its long term
future is really going to lie. Where is the trading
relationship need to be, where is that political relationship going
to be, where's that defense relationship going to be? And
if you look at a comp administration and it's likely
to already pulling the US and a more isolating its
(11:26):
direct and stepping away from obviously foreign aid responsibilities, but
but other potentially other responsibilities. As everyone worries about what's
going to happen with USA to Ukraine, that's going to
you know, leave the United Kingdom with some real choices
about where it needs to be when it comes to
protecting itself and protecting its interests in Europe and beyond.
Speaker 3 (11:49):
Yeah, really tricky on so many known unknowns. Where's froms
for when you when you need him? Kevin, thanks so
much again joining us great to get your thoughts on.
That's Kevin Whitelaw, Brussels Bureau Chief.
Speaker 1 (12:00):
Well, just to mention two, we've heard the last we've
heard from the Chancellor of Rachel Reeves saying that she
believes the UK can strike an agreement with the US
to avoid tariffs on steel and aluminium and also suggesting
that Britain doesn't plan to retaliate, so in line with
what we've been hearing from other ministers as well, and
talking about the need for balanced trade. What the UK
(12:20):
and US have means that there's not really a problem
in Rachel Reeves's eyes, that needs to be addressed through
tariff's or any other barrier. She was speaking to the
Political Party podcast, so interesting to get her perspective on
all of this as we're considering how the UK will
choose to respond. That's it from us for today. If
you like the program to Forget, to subscribe and give
(12:42):
it five stars so other people can find it on
Apple Podcasts, Spotify or wherever you listen.
Speaker 3 (12:47):
This episode rules produced by t at a Bio and
our audio engineer was Peter Nicolino. I'm new and Potts and.
Speaker 1 (12:53):
I'm Stephen Carroll. We'll be back with more tomorrow. This
is Bloomberg Bloomberg UK Politics.
Speaker 3 (12:59):
Listenek days at noon on DAB Digital Radio in London.
Bloomberg Audio Studios, podcasts, radio News.
Speaker 2 (00:08):
We are currently assessing the scope of the measures announced
overnight and we'll be responding infirm and a proportionate way
by countermeasures. We will act to safeguard our economic interests.
We will protect our workers, businesses and consumers.
Speaker 1 (00:26):
So that's how the European Union plans to respond to
Donald Trump's latest tariffs. That's from the Trade Commissioner maush Chefshovich.
There will the UK take the same approach. Hello, you're
listening to Bloomberg UK Politics. I'm Stephen Carroll and I'm
you and bots. Welcome to the program.
Speaker 3 (00:41):
Now, Steven ought to start the show with a rather
surprising fact. It's just three weeks since Donald Trump became
US president. Is that I had to double check this.
I thought it must be three months or so. But
the pace of change and the volume of announcements has
just been really quite something. But it's the President's utterings
on trade and tarent I've sort of really got the
atension of economists and investors. Trump says he plans twenty
(01:04):
five percent levees now on all imports of steel aluminium.
That's the latest one kicking in from next month, and
just this morning the EU's said it will respond with
firm and proportionate countermeasures. Commissioned President sul the underline, saying
that she deeply regrets the US levees, calling them unjustified,
and German chances that Olaf Schortz says that the EU
(01:25):
has the strength to respond to Trump's trade measures, but
Steve when it comes to the UK is looking like
Kirstama's government is pursuing altogether different playbook.
Speaker 1 (01:35):
Look, the UK is trying to avoid tariffs altogether, a
reasonably good plan, one would think. Bloomberg reporting, citing sources
saying the country doesn't want to escalate a trade war
by imposing retaliatory measures. Pinseecuty David Lammy saying over the
weekend the UK is an open, free market society that
doesn't believe in tariffs in either direction. Now, if this
(01:55):
gam but fails, though, UK Steel says American tariffs would
be a devastating bloe to the industry. The UK exports
around two hundred thousand tons of steely ear to the US,
which is about a third of what Germany exports. It's
less than what the Netherlands or Belgium individually export either
a little bit more than France or Spain, but nonetheless
quite a large amount of steel being exported from the UK.
(02:20):
So different responses from the UK and from the EU
at the time when the UK at least is trying
to mand relations with the European Union, so as Britain
and its closest neighbors being pulled in opposite directions by
Donald Trump.
Speaker 3 (02:33):
Yes, possibly an interesting divergence. Well, let's get more with
our Brussels bureau chief Kevin Whitelaw, who covered the previous
Trump administration in Washington for Bloomberg. O. Kevin, let's just
start off with what happened today. What exactly has the
EU announced when it comes to tariffs.
Speaker 4 (02:49):
Well, they haven't announced much other than they're very unhappy
with the move by the Trump administration and that they'll
have countermeasures ready assuming that this goes ahead as announced,
and so the date is March twelfth, as to win,
these are set to come in. And so obviously the
question not just in the EU but around the world
is this a negotiation or is this athetic complay? And
(03:11):
I think every country is now going to be reaching
out to the Trump administration trying to figure out all right, well,
what exactly are you looking for? Is the room to
talk about this? How do we avoid this kind of
attacktics rupt?
Speaker 1 (03:22):
Well, can you take us on a journey to the past,
if you will, to borrow a phrase in a Disney film,
to the last time around that we all experience this.
Because steel tariff's were something that Donald Trump also imposed
the last time that he was president, there was a
response to us, what does that tell us about what
the EU might do this time around?
Speaker 4 (03:41):
Yeah, well, there was a response, and the countries did,
in many cases work to try to negotiate ways around it.
For Canada and Mexico in particular, that meant negotiating quotas
that could come in without tarras. There was a little
bit of that from the EU side as well, but
for the most part, with the EU did was slap
on various kinds of retaliate retaliatory trade measured, including tariffs
(04:06):
on some very symbolic American products like Harley Davidson motorcycles,
they very beans, bourbon, that kind of thing. And in fact,
the Biden administration had basically just agreed to a truce
with the EU so that those measures were simply suspended.
That suspension comes up at the end of March, and
(04:28):
so the EU had already been facing a decision about
whether or not to extend that or to have those
snap back. So that's obviously one sort of tool that
they have in their immediate toolboxes. They look forward to
this next one. But you know, obviously we know that
more broadly, there's been a plan on the EU side
that has involved making several different lists of some possible
(04:50):
ways to retaliate against US tariffs, just sort of based
on whether you know, the extent of and breadth and
depth of whatever Trump decided to move ahead with. So
they'll also we'll be looking to see do they want
to impose the kind of penalties that are aimed to
begin a conversation i e. To begin a negotiations so
not too strong, or do they really want to try
(05:12):
to inflict some actual market pain and seek to deter
Trump from doing this in the future.
Speaker 3 (05:17):
So Kevin some pretty tough words out of Brussels today,
but it's not true that the twenty seven member states
are entirely united. Are then their view towards Donald Trump?
Some EU leaders are quite pro and many of them
can't stand the man and there's not entire union minity
over how to deal with this, is there?
Speaker 4 (05:37):
No, that's right, and obviously prey it is bort of
a broad Bruckle competence, and so you are in theory
going to see the Commission taking the lead on it.
But there definitely is the potential for individual country to
try to cut individual deal, and it's also very likely
that Trump may try to indeed exploit them they try
to make that happen as he tries to fracture a
little bit of the block's unity. But you know, at
(05:59):
least when it comes to the sort of metal tariff
that are they said going to hit probably Germany the
hardest there is, at least from that side, I think
still a fair amount of interest in trying to respond
in a unified way. But you know, they are taking
a certain amount of solace in the notes in that
Canada and Mexico have been able to at least come
to some early negotiations and stave off at least for
(06:23):
a time from some threatened tariffs, and so I do
think that they'll be watching closely as those negotiations continue,
as well as how China in the US end up
approaching the issue. As they go forward.
Speaker 1 (06:35):
So Kevin, does that tell us then that the UK
code manage to you know, escape these tariffs and take
a different approach and play this in a different way.
Speaker 4 (06:45):
I mean, it definitely does. I think everyone's going to
be doing this. We've already watched the Australians begin their
conversations with Trump over this, and it's very very likely
the UK will they have that flexibility obviously now post brexit,
to be able to cut their own deal without any
particular ramifications. But you know, they'll also be looking towards
(07:05):
the EU side and wanting to make sure that they're
preserving the relations with Brussels. So I think right now
what the UK has going forward is that Trump seems
to kind of like the Prime Minister and has had
pretty warm words procure Starmer up to now, and so
I do think that at least this time around, London
may not be in his immediate target zone. Yeah.
Speaker 3 (07:27):
And conversely, it'll be fair to say that Donald Trump
is not very keen on the European Union, calling the
trade relationship an atrocity recently, but he's got a long
standing kind of history of disagreements with the Brussels.
Speaker 4 (07:42):
Hasn't he Yes, I mean this has gone back away,
as he's talked several times throughout the campaign, not to
mention his first term, but you know several times in
the campaign and even after becoming president that Europe reached
the US unfairly. He called it netrocyty. He talked, as
you said, about tech policy. We had Vice President j
d Vance in Paris today at the Artificial Intelligence summit,
(08:06):
and you know there he also took on the block's
approach to tech. So I do think that you see
a number of different areas both in the trade zone
but also in sort of the broader regulatory approach where
there is a natural natural problem.
Speaker 1 (08:26):
Now the UK and ministers in the government here have
been very careful not to defend Donald Trump since he
became president, and have been very careful in their language
and reacting to the various steps that he's taken. The
UK's new ambassador to the US, Peter Mandelson, has been
trying to smooth things over in the special relationship, talking
about having to respect and understand what drives Trump and
(08:46):
his decision. Now, he'd previously been quite critical, so it's
a bit of a bit of a turnaround. For Peter Mandleson,
is that sort of language going to win over Donald
Trump and perhaps play favorably.
Speaker 4 (08:59):
I mean, it can't hurt, and it is interesting. There's
a number of different leaders, as you say, both in
the UK but also elsewhere, who have taken great pains
to try to compliment him, to flatter him, to appeal
to him in various ways. It feels it seems super transparent,
but it does sometimes seem to work. We've watched the
(09:20):
NATO chief Mark Rita do this several times, talking a
lot about what Trump has done on defense spending and
trying to credit him with a number of things that
basically those were happening already. So I do think that
there's always that potential. But ultimately, you know Trump, he
does like to win, he does like to be seen
(09:41):
getting things, and I think there's always that slight risk
that at some point the UK is going to do
something that intentionally or otherwise is going to put itself
potentially right in Donald Trump's target zone. And that's where,
you know, that's where all of that work could get
undone really quite quickly.
Speaker 3 (10:00):
Yeah, and the UK obviously has a has a good
chance to diverge from the from the EU here perhaps
you know, getting getting off US tariffs if they if
they can win Donald Trump round. But there are risks
to this, aren't they. In as far as the UK
is also trying to build a better relationship with the EU,
and potentially this could go down quite badly in Brussels, right,
(10:21):
you know.
Speaker 4 (10:21):
I think it depends as to who's you know, as
to who's expensive any deal comes at. Right, So if
they're able to cut their own deal and it doesn't
affect the relationship with the EU directly, there there may
not be resentment in particular, there may not be an
immediate backlash, but at some point London is probably not
gonna be able to have it both ways, and so
there has been this conversation about a UK EU reset.
(10:43):
I think Brussels is frankly still trying to figure out
what that what what the new UK government means by that,
and it's possible Dummer himself is still trying to figure
that out. But obviously if that gets serious, that that
becomes something much bigger than that has the risk of
starting to you know, put put the UK back in
(11:04):
sort of the EU camp. As far as as far
as Donald Trump is concerned, you know, but obviously the
UK also has to think about where its long term
future is really going to lie. Where is the trading
relationship need to be, where is that political relationship going
to be, where's that defense relationship going to be? And
if you look at a comp administration and it's likely
to already pulling the US and a more isolating its
(11:26):
direct and stepping away from obviously foreign aid responsibilities, but
but other potentially other responsibilities. As everyone worries about what's
going to happen with USA to Ukraine, that's going to
you know, leave the United Kingdom with some real choices
about where it needs to be when it comes to
protecting itself and protecting its interests in Europe and beyond.
Speaker 3 (11:49):
Yeah, really tricky on so many known unknowns. Where's froms
for when you when you need him? Kevin, thanks so
much again joining us great to get your thoughts on.
That's Kevin Whitelaw, Brussels Bureau Chief.
Speaker 1 (12:00):
Well, just to mention two, we've heard the last we've
heard from the Chancellor of Rachel Reeves saying that she
believes the UK can strike an agreement with the US
to avoid tariffs on steel and aluminium and also suggesting
that Britain doesn't plan to retaliate, so in line with
what we've been hearing from other ministers as well, and
talking about the need for balanced trade. What the UK
(12:20):
and US have means that there's not really a problem
in Rachel Reeves's eyes, that needs to be addressed through
tariff's or any other barrier. She was speaking to the
Political Party podcast, so interesting to get her perspective on
all of this as we're considering how the UK will
choose to respond. That's it from us for today. If
you like the program to Forget, to subscribe and give
(12:42):
it five stars so other people can find it on
Apple Podcasts, Spotify or wherever you listen.
Speaker 3 (12:47):
This episode rules produced by t at a Bio and
our audio engineer was Peter Nicolino. I'm new and Potts and.
Speaker 1 (12:53):
I'm Stephen Carroll. We'll be back with more tomorrow. This
is Bloomberg Bloomberg UK Politics.
Speaker 3 (12:59):
Listenek days at noon on DAB Digital Radio in London.
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