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International Internet Magazine. Baltic States news & analytics Thursday, 25.02.2021, 01:05

MFA: US decision on tariffs upsets Lithuania, but doesn't mean trade war

BC, Vilnius, 01.06.2018.Print version
Lithuanian officials say that the US decision to impose tariffs on EU steel and aluminum imports is very disappointing, but does not mean a trade war, informs LETA/BNS.

"First of all, we are very disappointed, because the intensive talks between the European Commission and the United States, and efforts by other European countries to persuade them not to apply these measures against the EU failed," Deputy Foreign Minister Albinas Zananavicius told BNS by phone from Paris on Thursday. 

A 25% tariff on steel imports and a 10% tariff on aluminum imports from the EU, Canada and Mexico will take effect on Friday. 

EU capitals expressed their outrage and disappointment over the US decision and the European Commission announced it was planning retaliation. 

According to Zananavicius, the US solution is in line with recent protectionist trends, but "the EU's aim is to keep global trade free". "Obviously, we are entering a completely new stage where we are subjected to measures on the basis of US national security. We can't see how the EU can threaten US national security," the official said.   "The EU is definitely not a problem here, because we don't have surplus steel and aluminum production," he added. 

According to the vice-minister, the EU's response to Washington will be based on international trade rules and, therefore, these processes should not be called a trade war. "Under international trade rules, the EU has the right to impose compensatory, counter-balancing retaliatory measures," he said. 

In the official's words, the US tariffs will not directly affect Lithuanian businesses. 

Steel and aluminum are used in various industries, including car manufacturing, and road and railway construction. 

Washington's tariffs on EU steel and aluminum imports may affect Lithuanian businesses, even though the country does not export these raw materials to the US, an analyst said on Friday. 

Aleksandr Izgorodin, economic adviser at the Lithuanian Industrialists' Confederation, says that the tariffs lead to an increased uncertainty that may harm the EU and Lithuanian economies.  "The US decision to increase the tariffs on steel and aluminum may adversely affect Lithuania's contract manufacturing industry through a decrease in orders from major EU economies," he said in a comment. 

According to the analyst, the US last year accounted for a mere 3.4% of Lithuania's total exports, compared with the 12% share held by Germany, Lithuania's biggest export partner. On the other hand, 80% of Lithuania's exports go to the EU market, and intermediate consumption products have a significant share in the export structure. 

"This is a risk for the Lithuanian industry, which is increasingly integrating itself into production chains of major EU countries," he added. 

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