Moscovici blasts Trump over ‘inappropriate’ trade sanctions

Pierre Moscovici [European Commission]

EU finance chief Pierre Moscovici fired a barb at US President Donald Trump on Sunday (22 July) as he called on both sides of an ongoing global trade dispute to “act as allies”.

The US and EU have been at loggerheads since Trump angered European allies by announcing tariffs on steel and aluminium as he launched trade restrictions targeting China in particular.

Referring to Trump branding the EU, alongside China and Russia, as trade “foes,” Moscovici said the EU is “willing to build bridges.”

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“What I stressed several times in my meetings here is that the EU is certainly not the author of major trade imbalances,” Moscovici told reporters during the Group of 20 summit in Buenos Aires.

On Saturday, US Treasury Secretary Steven Mnuchin spoke at the conference about wanting to “balance” the country’s trade relationships with China and the EU, calling on both to respect “free, fair and reciprocal trade.”

But Moscovici said that “we believe that targeting us is certainly inappropriate… and that we must act with the US as allies — not foes but allies.”

“These meetings take place in an international context which is changing,” he said. “The multilateral system of which the G20 is a central piece is under significant pressure, trade tensions are high and threaten to escalate further. All of this creates uncertainty for the economic outlook.”

He added: “We must remain cool-headed.”

Trump’s protectionist policies have come under fire from all sides at the summit, which groups finance ministers and central bankers from the world’s 20 largest economies.

Trump starts trade war with allies, Europe to respond 'within hours'

President Donald Trump announced on Thursday (31 May) that the United States would slap tariffs on steel and aluminium from the EU, Canada and Mexico, prompting Europe to say it would respond with “counterbalancing measures within hours” in what amounts to a trade war with Washington.

On Saturday, French finance minister Bruno Le Maire called on Trump to “return to reason.”

As well as imposing tariffs of 25% on steel and 10% on aluminium, Trump stuck a 25% levy on $34 billion of goods from China with an additional $16 billion on the way.

He has threatened to target European automotive exports and to impose duties on the entire $500 billion of goods the US imports from China.

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US President Donald Trump threatened on Friday (22 June) to impose a 20% import tariff on all cars manufactured in the EU if recent sanctions the bloc slapped on Washington are not “broken down and removed”, continuing the tit for tat trade war with America’s nominal allies.

“The impact of protectionist measures already implemented has been, luckily, so far limited, but the risk of escalation is there,” said Moscovici.

The International Monetary Fund predicts that in a worst-case scenario, $430 billion — or a half percentage point of global GDP — could be cut in 2020 if all tariff threats and retaliations are carried out.

“Further trade escalation conflicts would negatively affect welfare in all countries involved — in the US also,” said Moscovici.

Protectionism, he said, benefits no one, creating “no winners, only casualties.”

IMF chief Christine Lagarde had warned on Wednesday that the US economy was “especially vulnerable” to trade conflicts “because so much of its global trade will be subject to retaliatory measures.”

Another divisive issue at the G20 summit is the EU push for global rules to tax the digital economy. The US is strongly against.

Europeans press for digital tax at G20 meeting

European finance leaders called for progress on global rules to tax the digital economy at a meeting of G20 finance ministers and central bankers in Argentina on Sunday (22 July), putting them at odds with US counterparts.

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