Austria's Kurz Warns on EU-U.S. Trade War as Waivers Expire

(Bloomberg) -- Austrian Chancellor Sebastian Kurz said a trade war between the European Union and the U.S. over the Trump administration’s imposition of steel and aluminum tariffs would be “extremely negative” for both sides.

The EU should consider a collective response if the U.S. doesn’t extend tariff waivers that expire this Tuesday, Kurz said in a Bloomberg Television interview. Speaking Sunday in Abu Dhabi, Kurz said he he hopes the trade barriers announced by U.S. President Donald Trump “won’t turn into reality.”

Austria assumes the 28-nation EU’s rotating six-month presidency in July, when it will spearhead the group’s handling of a number of thorny issues ranging from Brexit to immigration, and now the prospect of a trade war between the U.S. and some of its closest allies.

“I admit, I am concerned that there could be some new trade barriers,” Kurz said. “If it comes to that, I hope that we as the EU can come to agreement very quickly on a common and clear position. I hope that this won’t unleash any negative spiral that leads to a trade war and that, rather, the US will reconsider its ideas about trade barriers.”

His comments add to a push by EU leaders ahead of the deadline, with German Chancellor Angela Merkel and French President Emmanuel Macron meeting Trump in separate trips to Washington last week to lobby for a permanent extension.

Extend Relief

Wilbur Ross, Trump’s commerce secretary, has said the administration plans to extend relief from the tariffs to some, but not all, countries. Meanwhile, the EU last week asked to join a case, starting with consultations, that was initiated by China at the World Trade Organization over the U.S. steel and aluminum tariffs.

Kurz was in Abu Dhabi to witness the signing of a $1.5 billion deal between Austrian oil and gas producer OMV AG and Abu Dhabi’s state-owned energy giant, Abu Dhabi National Oil Co. Abu Dhabi’s Mubadala Investment Co. holds a 24.9 percent stake in OMV and a majority stake in Borealis AG, the Austrian chemical maker.

OMV Chief Executive Officer Rainer Seele told Bloomberg in a separate interview that the company would pursue additional opportunities to partner with Adnoc in areas like refining and petrochemicals. Kurz said he would back the company’s expansion in the capital of the United Arab Emirates, which he called Austria’s most important trading partner in the Persian Gulf region.

European Security

Kurz, the leader of the conservative People’s Party, is in a coalition government with the nationalist Freedom Party, and the chancellor has said he plans to place EU security high on the agenda for the presidency, alongside scheduled issues such as Brexit and the budget.

“Every country in the EU should make a personnel and a financial contribution in that area,” Kurz said about the EU’s external border control. “We shouldn’t leave alone countries like Italy and Greece that have external borders, rather we must make the external borders safe together. That is what creates the basis for a Europe without internal borders. A goal of our presidency is to make progress in this area.”

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