The European Union’s European Commission head, Jean-Claude Juncker, flew to Washington to have a sit down with US President Donald Trump about the tense trade situation between the traditional allies and trade partners. Trump’s tariffs programme might have been billed as a national security precaution, but that’s just how he managed to get it by Congress. The rhetoric surrounding Trump’s trade policy as it relates to the EU had to do with negotiating ‘better’ deals, because the current ones just aren’t good enough for America. It’s really no fair if Europe can have higher tariffs on stuff coming from America than what the Americans can realize from Europe.
So, that situation needs to realize some equity and get ironed good and flat. So, Juncker flew to DC and has had a meeting with Trump. What happened at this meeting? Basically, Europe can’t abide a full flown trade war with the US, and regardless of how the US wants to play the game and bend or break the rules, if the game is to be played at all, they know they’ve got to keep Trump interested. Essentially, that means that Trump enjoyed the position of power and dominance while the Europeans were happy to have a chance to reestablish some normalcy in relations, and to find a deal with Trump to end the trade tensions. So, Juncker promised, in exchange for tariff relief, a slew of concessions. On this point, Deutsche Welle reports just what that included:
US President Donald Trump and European Commission President Jean-Claude Junker met at the White House on Wednesday, where they announced that the US and the European Union would work to reduce trade tensions that have arisen over the past few months out of Trump’s confrontational trade policy.
The meeting comes after weeks of acrimony between the US and EU — which account for 50 percent of global trade — as both sides slapped tariffs on one another.
Major points announced
In an unexpected press announcement in the Rose Garden, Trump and Juncker laid out the major goals that they had agreed upon in their meeting:
The US and the EU would work towards “zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods,” Trump said.
The EU would buy significant amounts of liquid natural gas from the US to help diversify the bloc’s energy sources, as well as increase its imports of US-grown soybeans.
Both sides will hold off from imposing any further tariffs and will reassess existing tariffs on US steel and aluminum as long as trade talks remain ongoing.
Both the US and the EU would work to reform the World Trade Organization (WTO), which Trump has criticized for unfairness toward the US.
Statements from Trump and Juncker
Trump said that the US and the EU had launched “a new phase of close friendship and strong trade relations in which both of us will win.”
“If we team up we can make our planet a better, more secure and prosperous place,” the US president added.
Juncker described his talk with Trump as “a good and constructive meeting.”
“We made a deal today,” the European Commission president said. “We have identified a number of areas on which to work together.”
Prior to their post-talk statements on the White House lawn, the two leaders had voiced optimism in a press briefing that common ground could be found on the contentious issue of trade tariffs.
DW’s Washington bureau chief Alexandra von Nahmen was in the room and described the greeting between the two men as “quite friendly” but noted there was a “tense” air.
A new direction in trade?
If trade barriers between the US and the EU are eventually reduced following future talks, the result would be a significant U-turn from the US president’s protectionist policies toward Europe, which he has called a “foe” to American trade.
Trump had threatened to impose 25 percent tariffs on auto imports, which would strongly impact German automakers such as BMW and Volkswagen. While both he and Juncker said no new tariffs would be imposed as long as trade talks remained ongoing, it was unclear whether or not Trump had backed away from eventually slapping import fees on foreign cars, given the “non-auto industrial goods” exception he pointed out.
The US has criticized the EU’s — and in particularly Germany’s — imports of Russian energy sources, and Juncker’s stated intent to import American liquefied natural gas built on the European Commission’s desire to diversify energy imports.
Juncker’s willingness to reform the WTO with Trump lines up the EU with the US against China. Trump has criticized the trade organization’s failure to address advantages China creates for itself through its state-run economy.
The EU’s commitment to buy soybeans can be billed by Trump as a success in advocating for US farmers. On Tuesday, the White House announced emergency aid to farmers hurt by retaliatory tariffs on agricultural products.
Now, Trump has gained a customer for American LNG and found something to do with the excessive surplus of soybeans that American farmers are sitting on due to trade tensions with China. Additionally, Trump has found an ally in the interest of ‘reforming’ the World Trade Organization. The EU, for its part, is looking at potential tariff relief on steel and aluminum, and the possibility of an end to talk of placing tariffs on European autos. However, the last time trade talks went down like this, it was with China. For weeks, trade talks were on going, and an apparent truce was reached on the tariffs war. But just a matter of days later, tensions and tariffs were back as the Trump administration realized that China was still a ‘threat’ after all.
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