March 14, 2018 / 1:29 PM / 5 days ago

UPDATE 1-Revive trade deal talks to avoid trade war, EU urges Trump

* Tusk wants revival of TTIP trade talks, frozen in 2016

* EU seeks exemptions from Trump’s metals tariffs

* Commissioner believes both parties in Congress share its view

* EU wants to work with U.S. on overcapacity problem (Updates with Tusk suggestion)

HELSINKI/STRASBOURG, France, March 14 (Reuters) - The European Union urged the United States on Wednesday to revive trade talks rather than escalate a dispute over tariffs on metals and cars.

President Donald Trump last week signed an order to impose duties on incoming steel and aluminium and threatened to levy a tax on EU cars if the European Union does not remove “horrific” tariffs and trade barriers on a range of goods..

European Council President Donald Tusk responded on Wednesday by urging Trump to “make trade not war”.

“When the president complains of too many tariffs between the EU and the U.S. I can understand him. We are not happy either,” Tusk, who chairs summits of EU leaders, told a news conference in Helsinki.

“That is the reason why a few years ago we started trade negotiations with the U.S. We should go back to these talks now. Make trade not war, Mr President,” he said.

Tusk was referring to planned Transatlantic Trade and Investment Partnership (TTIP) talks which were frozen after Trump’s election victory in 2016.

The European Commission - which has drawn up a list of U.S. products worth 2.8 billion euros ($3.5 billion) on which it could impose tariffs if EU steel and aluminium is hit - also sought to be conciliatory.

“This is not a dispute between Europe and the United States as such,” Commission Vice President Jyrki Katainen told the European Parliament.

“That’s why the Commission will concentrate on problem-solving, instead of provoking further problems.”

Katainen said U.S. business and both parties in Congress shared the EU’s belief in trade guided by international rules.

“What we want to do is clear up this mess. I think there are good reasons why both sides will accept, at the end of the day, that we don’t need, we don’t want, a trade war. Instead we should concentrate on improving our trading conditions.”

The EU disputes Trump’s line on tariffs and his emphasis on cars, for which the U.S. tariff, at 2.5 percent, is lower than the EU’s 10 percent. For other products, U.S. tariffs are higher, such as trucks at 25 percent compared with an EU rate that can be as low as 10.

European Trade Commissioner Cecilia Malmstrom said dialogue with the United States was “intense”, adding that the root cause of problems for steel and aluminium was overcapacity, a topic on which the EU, United States and Japan were cooperating.

Malmstrom, who held talks with U.S. Trade Representative Robert Lighthizer on Saturday, said she had not been given any clear reassurance that the EU would be exempted.

“We are in contact with the U.S. counterpart to obtain more clarity as soon as possible and we have been told that the USTR will publish very soon on their website a more detailed outline of the procedures for the exclusions,” she said. ($1 = 0.8083 euros) (Reporting by Philip Blenkinsop Editing by Robin Pomeroy)

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