Trade war risk still exists, warns EU trade commissioner

EU's trade commissioner Cecilia Malmstrom on Thursday said the risk of a trade war still exists.

"All sides would be losers in a trade war," she said, pledging to work "to the end" to avoid it.

Malmstrom talked to the media after meetings with Anne-Mari Virolainen, minister for foreign trade and development, Finland and Finnish lawmakers.

Malmstrom said the EU has told the United States that the EU is willing to cooperate with the United States on issues only within the rules of the World Trade Organization (WTO).

With only a few days to go before the end of the exemption the United States has given to the EU on the new steel and aluminum duties, Malmstrom said the EU expects a complete exemption, not another restricted period.

Malmstrom admitted that a risk of a full scale trade war exists. "If the penalty customs between the U.S. and China take effect, with further escalation, the situation can be dangerous," she warned.

Malmstrom said that countries that are deeply integrated in the global value chain, such as Finland, could be impacted.

The EU trade commissioner saw the emergence of a kind of alliance of countries that believe trade can benefit all. She noted that other signatories of the TPP agreement decided to go ahead without the United States while a free trade agreement was signed between the EU and Japan.