US President Donald Trump's announcement of duties of 25 percent on imported steel and 10 percent on aluminium has stung its major partners

Brussels (AFP) - The EU’s top trade official said the US failed on Saturday to provide full clarity on how Europe and Japan could be spared from Washington’s controversial steel and aluminium tariffs, but said talks would continue next week.

European Trade Commissioner Cecilia Malmstroem made her statement after crunch talks with US Trade Representative Robert Lighthizer in an effort to defuse a bitter row that many fear could turn into an all-out trade war.

President Donald Trump’s announcement of duties of 25 percent on imported steel and 10 percent on aluminium has stung the European Union, along with other major partners including Japan, whose Economy Minister Hiroshige Seko also attended the talks in Brussels.

“As long-standing security partners of the United States, (the EU and Japan) underlined to ambassador Lighthizer their expectation that EU and Japanese exports to the US would be exempted from the application of higher tariffs,” an EU statement said after the talks.

But after two-way talks with Lighthizer, Malmstroem tweeted: “No immediate clarity on the exact US procedure for exemption however, so discussions will continue next week.”

- Match ‘stupid with stupid’ -

Japan's Economy Minister Hiroshige Seko was also in Brussels for the talks

Brussels has gone the furthest in fighting back against Washington’s shock measures, loudly announcing a list of US products to hit with countermeasures if its exports are affected by the tariffs.

In announcing the measures, European Commission head Jean-Claude Juncker taunted Trump, saying the EU could match “stupid with stupid”.

Lighthizer, a loyalist to Trump’s “America First” mantra, made no official comment after the talks, but the three sides did agree on a series of next steps to address the oversupply worldwide of steel and other materials, mainly by China.

This progress was “unexpected” and a source of cautious optimism on solving the tariff row, an EU official said on condition of anonymity.

“If Trump wants his allies to demonstrate that they are united in tackling problems with China, this is precisely that,” the source added.

- US ‘affront’ -

With tensions at a peak, the EU had sought to keep low expectations for any breakthrough on Saturday. European Commission Vice President Jyrki Katainen said it would be “a meeting, not THE meeting”.

Along with a huge range of steel products, the EU’s hit list of flagship American products lined up for counter measures includes peanut butter, bourbon whiskey and denim jeans.

The EU exports a billion euros' worth of aluminium to the US each year

Germany – singled out for particular criticism by Trump – accused Washington of protectionism, calling the tariffs an “affront to close partners”.

German Chancellor Angela Merkel warned that “no one can win in such a race to the bottom” while French President Emmanuel Macron said Trump risked provoking a mutually destructive “trade war”.

Trump said the tariffs, which will come into effect after 15 days, will not initially apply to Canada and Mexico. He also added Australia to the list of likely carve-outs.

Complicating matters, Trump indicated that the sparing of Australia was linked to an unspecified “security agreement” outside of trade policy.

This shed light Trump’s attacks against Germany – the biggest economy in the European Union – that have accused Berlin of contributing much less than the US towards the funding of NATO.

The EU exports around five billion euros’ ($4 billion) worth of steel and a billion euros’ worth of aluminium to the US each year, and the European Commission, the bloc’s executive arm, estimates Trump’s tariffs could cost some 2.8 billion euros.

European Commission Vice-President Jyrki Katainen said on Friday: "We are prepared and will be prepared if need be to use rebalancing measures"

Brussels is also looking at “safeguard” measures to protect its industry – restricting the bloc’s imports of steel and aluminium to stop foreign supplies flooding the European market, which is allowed under World Trade Organization rules.