BRUSSELS—U.S. allies breathed a sigh of relief after President Donald Trump’s last-minute decision to postpone tariffs on imports of steel and aluminum from some of Washington’s closest partners helped avoid a trade war, but left many questions about what comes next.
The European Union “takes note of the decision” to delay a ruling by one month, said the European Commission, the EU’s executive arm, in an unenthusiastic statement.
“The U.S. decision prolongs market uncertainty, which is already affecting business decisions,” the commission said. “The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.”
The White House said late Monday that broad tariffs of 25% on steel and 10% on aluminum—already in effect against China, Russia, Japan and others—wouldn’t go into force for the EU on Tuesday as previously planned. Instead, the bloc has another month to continue negotiating with the U.S. about a new pact to avoid the tariffs.
As expected, Canada and Mexico were given an extension, also until June 1, while talks about rewriting the North American Free Trade Agreement proceed.
The EU said Trade Commissioner Cecilia Malmstrom “has been in contact with U.S. Commerce Secretary Wilbur Ross and Trade Representative Robert Lighthizer over the past weeks, and these discussions will continue.”
Other European governments endorsed the stance of the commission, which represents all 28 EU members in trade talks.
Great Britain “will continue to work closely with our EU partners and the U.S. government to achieve a permanent exemption,” a U.K. government spokesman said. German government spokeswoman Martina Fietz echoed the expectation of permanent waivers, calling for more dialogue and deeper trade ties with the U.S. A French official said Paris backed the EU push for exclusions, while reiterating France’s support for the bloc’s refusal to engage in trade negotiations with the U.S. when under threat of tariffs.
The White House said it had agreements, in principle, to avoid imposing tariffs on Argentina and Brazil—details haven’t been completed but the, countries have agreed to quotas, a senior administration official said.
Australia confirmed Tuesday that it had been granted permanent exemption from the tariffs. South Korea has also secured permanent exemptions with some concessions that observers say will have limited impact on its bilateral trade with the U.S. A government official in Seoul said South Korean steelmakers were in talks on how to apply the U.S. export quota to individual firms.
Talks with Europe could prove more difficult because EU officials have said quotas violate the rules of the World Trade Organization.
European officials argue that the U.S. national security reasons cited for the metals tariffs are thinly disguised illegal protectionism under WTO rules. They noted that 22 of the EU’s 28 members are also North Atlantic Treaty Organization allies of the U.S. and hold common interests—such as curbing Chinese policies—that the U.S. and EU say distort global trade.
Mr. Trump has accused the EU of being unfair on trade. He has demanded measures including a cut in the EU’s 10% tariff on American cars to reduce the U.S. trade deficit with the bloc.
The EU and its members, led by Germany, have signaled an openness to address what Ms. Malmstrom called “trade irritants” on both sides. But the bloc has also stressed that it wouldn’t negotiate a trade accord “at gunpoint,” calling on Mr. Trump to first exempt the EU unconditionally and indefinitely from steel and aluminum tariffs.
Brussels has also pushed to engage the U.S. in multilateral efforts such as a global forum to tackle steel overcapacity—driven by China—and together with Japan to revamp the WTO in an effort to counter Beijing’s model of state-capitalism.
“We should rather focus on a positive trade agenda,” said Jyrki Katainen, a commission vice president also responsible for trade, in a tweet Tuesday. “The EU & the U.S. are allies.”
—Jenny Gross in London, William Horobin in Paris, Kwanwoo Jun in Seoul and Bojan Pancevski in Berlin contributed to this article.
Write to Emre Peker at emre.peker@wsj.com and Daniel Michaels at daniel.michaels@wsj.com
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