Translated by
Nicola Mira
Jul 26, 2018
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Trump and Juncker defuse USA-EU tariff row

Translated by
Nicola Mira
Jul 26, 2018

On Wednesday, US President Donald Trump and EU Commission President Jean-Claude Juncker defused the crisis that was looming after the USA’s recent decisions on tariffs, and announced new measures for agriculture, industry and energy, whose exact impact is yet to be confirmed.

US President Donald Trump with EU Commission President Jean-Claude Juncker at the White House on July 25 2018 - AFP

According to a EU source, new customs duties will not be imposed on European car imports by the USA, an issue that was especially sensitive for the German government.

Speaking in the White House’s garden, Trump said it was a “great day” for free trade, and called this a “new phase” in the relationship between Washington and Brussels, after months of warnings and threats issued from both sides of the Atlantic.

The two leaders emphasised their shared intention of eventually going in the direction of suppressing customs duties on industrial goods, except for the automotive sector, and Trump guaranteed the EU would “almost immediately” begin to buy “great quantities of soya” from US producers. He also promised to review the issue of the tariffs on European steel and aluminium, which sparked the trade row.

"A breakthrough"

On Twitter, the German Minister of the Economy, Peter Altmaier, immediately saluted a "breakthrough" which "could stave off a trade war and save millions of jobs."

“Today we have reached an agreement,” said Juncker, underlining the EU’s intention to increase its imports of liquefied natural gas (LNG) from the USA, in order to diversify its energy sourcing.

Earlier on, at the start of the one-on-one discussion in the Oval Office, Juncker insisted that the USA and the EU, which together account for half of the world’s foreign trade, are “close partners” and “allies”, and not “enemies.”

Labelled by Donald Trump as a “very intelligent” man, but also a “very tough” one, Juncker talked about a “strengthening of the cooperation on energy resources.”
A few hours earlier, from Johannesburg in South Africa, Chinese President Xi Jinping warned his US counterpart that no one would emerge as a “winner” in a trade war.

Evidence of the turmoil generated by the US President's adversarial stance on foreign trade is the fact that, on Tuesday, the Trump Administration announced urgent aid measures worth $12 billion in favour of farmers hit by foreign retaliation for the tariffs imposed by Washington against China, the EU and Canada.

Reforming the WTO

Donald Trump also announced that the USA and the EU will be working together to reform the World Trade Organisation. He mentioned in particular, in a dig aimed at China, issues like intellectual property theft and the forced transfer of technologies.

“We will work closely together with partners who share our ideas to reform the WTO, and address the issue of illegal trading practices, including intellectual property theft, the forced transfer of technologies, subsidies to industry, the distortions created by state-owned corporations and overcapacity,” said the US President.

On the eve of the meeting, Trump had once again denounced the attitude of the EU, against which he has been making viciously barbed comments for several months.

Trump expressed his satisfaction, in the deliberately provocative tone he favours, for the fact that the countries targeted by US tariffs “are all coming to Washington to negotiate,” insisting that his strategy will eventually bear fruit and that “the outcome will be worth it.”

Yet his attitude is winning far from unanimous approval within the Republican party, traditionally in favour of free trade.

"I do not think that customs tariffs are the right response,” said Paul Ryan, Speaker of the US House of Representatives and a top Republican politician.
Ryan hails from Wisconsin, the state where Harley-Davidson motorcycles are manufactured. Indeed, Harley-Davidson has issued a clear warning that a trade war between the USA and its partners would erode its margins in 2018.

Like Ryan, other Republican representatives and senators are uneasy about the possible impact of the President’s crusade on the mid-term elections scheduled next November.

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