Juncker Trip Defuses EU-US Trade Spat
European Commission President Jean-Claude Juncker was being hailed as somewhat of a miracle worker after it appeared the US and EU had agreed to end an impending transatlantic trade war before it had really begun.
No actual negotiations were held during Juncker’s meeting in Washington with President Donald Trump on Jul. 25 and no papers signed; however, the two sides agreed to conduct further talks on tariffs, and it seemed possible that at least some of the proposed levies could be avoided.
Commenting on the relatively congenial atmosphere in the US capital during the Juncker visit, one “senior EU official” told the news agency Reuters that Trump’s advisors appear to have been placated by Juncker’s suggestion that Europe would import more US liquefied natural gas, buy more American soybeans and cooperate on challenging China’s trade practices.
The official added that the US side also seemed impressed that Juncker was backed by 28 economies and recognized that Trump’s touted plans for drastic tariffs on EU products could “open up a 50 billion euro trade nightmare.”
In a joint press conference with the EU leader, Trump praised the Europeans’ perceived turnaround on LNG imports, an issue the president had pushed at the NATO summit in Brussels earlier this month – if the conditions were right and the price competitive, as Juncker later clarified in a speech at the Center for Strategic and International Studies in Washington.
Juncker hinted that the EU could build more terminals to receive US shipments of LNG. The soon to be 27-member union “is going to be a very very big buyer” of US-made gas, Trump assertedl According to the business news network CNBC, Portugal and Spain are already “steady buyers” of natural gas from the US.
No mention was made, at least publicly, about any continuation of the conflict concerning European imports of natural gas from Russia. In Brussels and afterward, Trump had repeatedly criticized plans for a second Nord Stream pipeline through the Baltic Sea, linking Germany with Siberian gas fields while bypassing Ukraine.
US Treasury Secretary Steve Mnuchin said the two sides had reached a “general agreement” to work toward zero tariffs – which some were calling a “TTIP light” – and reform the World Trade Organization (WTO). In one of his early moves as US president, Trump terminated the long-running negotiations on the Transatlantic Trade and Investment Partnership, a treaty not without controversy in some European quarters.
According to US media reports, Trump did not definitively agree to suspend steel and aluminum tariffs recently imposed on EU countries, and Juncker did not commit to reduce tariffs on US automotive imports. Neither did the US president pledge to remove the threatened 25% duty on European car imports, although he said he would not impose new tariffs on European goods generally.
Before the US president could place tariffs on automotive imports, the Commerce Department would have to issue a finding that they pose a national security threat. This is the premise on which the president was working when these tariffs and those on steel and aluminum were announced.
Despite the many uncertainties, Germany’s chemical industry association Verband der Chemischen Industrie (VCI) said the preliminary burying of the hatchet is reason to hope for a change of direction in the current trade dispute. While calling it “a positive signal” for German chemical producers, the association’s general manager, Utz Tillmann, said it is “only a first step.” At the same time, he called for complete elimination of the already low duties on chemical products.
