Juncker in last-ditch bid to ‘dedramatise’ tensions with Trump

US President Donald Trump (R) and President of the European Commission Jean-Claude Juncker chat prior to the morning working session on the second day of the G20 economic summit in Hamburg, Germany 8 July 2017. [Pool/EPA/EFE]

European Commission chief Jean-Claude Juncker heads to Washington on Wednesday (25 July) in a last-ditch effort by the EU to cool nerves and find an exit door from an all-out trade war with US President Donald Trump.

Juncker, a grizzled veteran of EU politics, follows a long list of European leaders, including German Chancellor Angela Merkel, who have tried to lure Trump away from a protectionist onslaught that has spooked financial markets and the world.

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Europe can no longer completely rely on its allies, German Chancellor Angela Merkel said yesterday (28 May), pointing to bruising meetings of G7 wealthy nations and NATO last week.

The former Luxembourg prime minister is going to Washington without a negotiating mandate, but with the intention of thinking “outside the box” to “find a solution” with Trump, said EU Trade Commissioner Cecilia Malmström, who will join Juncker on the trip.

Juncker leaves for Washington on Tuesday and his meeting with Trump is scheduled for 1330 (1830 CET) on Wednesday, to be followed by a speech on EU-US ties at a think-tank.

“It is an opportunity to dedramatise any potential tensions on trade and to engage into an open, constructive dialogue with our American partners,” Juncker’s chief spokesman, Margaritis Schinas, told a news briefing.

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On the eve of his meeting with Russia’s Vladimir Putin, US President Donald Trump rattled allies once more by labeling the European Union a “foe” with regard to trade.

Whiskey, jeans and motorbikes

At stake is a White House threat to slap a daunting wave of tariffs on European auto exports to the US, an action that Europeans say would trigger a global economic earthquake and earn a withering riposte from Brussels.

If confirmed, Trump’s auto tariffs would add to the steel and aluminium tariffs imposed in June that seriously damaged transatlantic relations already frayed by Trump’s pullout of the Paris Agreement on climate change and the Iran nuclear deal.

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Emmanuel Macron told Donald Trump late Thursday that tariffs on steel and aluminium imports from the European Union were “illegal” and that the EU would respond in a “firm and proportionate manner”, the Elysée Palace said.

In response, the EU on 22 June imposed a raft of retaliatory tariffs that targeted the most emblematic of American exports, from blue jeans to Harley Davidson motorbikes and whiskey.

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The European Union slapped revenge tariffs on iconic US products including bourbon, jeans and motorcycles on Friday in its opening salvo in a trade war with President Donald Trump.

Fearing car tariffs, Brussels is already drawing up a list of more US products that could be hit with retaliatory duties if Juncker’s trip fails.

Trump threatens 20% levy on all European cars

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.

“We will continue to respond toe-to-toe to provocations,” Juncker warned in a speech on Wednesday.

“All efforts to divide Europeans are in vain,” he added.

‘Gun to the head’

Juncker’s Commission handles trade matters for the EU28 and he goes to the White House with the firm backing of Merkel, the leader of export powerhouse Germany, a country that Trump has angrily singled out for “punishing the US on trade”.

Merkel expressed hope at the end of last week that Juncker could negotiate a solution with Trump and stop the trade war.

Tit-for-tat feuding between the allies would be “by far the worst-possible solution”, Merkel warned, describing the current trade tensions as “very serious”.

Juncker pledges 'tit for tat' measures against US

The EU will respond to any provocation coming from the US on trade or any other matter, European Commission President Jean-Claude Juncker warned on Wednesday (18 July) ahead of his trip to Washington to meet Donald Trump next week.

The potential car tariffs would not just violate the rules of the World Trade Organisation, she added, but could also “endanger the prosperity of many people around the world”.

But the prospects for trade peace seemed slim at G20 talks on Saturday after US Treasury Secretary Steven Mnuchin, a close Trump ally, said Washington would demand a wide-ranging trade deal with Europe in order to stand back on its tariff threat.

“If Europe believes in free trade, we’re ready to sign a free trade agreement with no tariffs, no non-tariff barriers and no subsidies. It has to be all three,” said Mnuchin at the talks in Argentina.

But French Finance Minister Bruno Le Maire shot back firmly: “We refuse to negotiate with a gun to the head”, insisting that Trump must first withdraw the steel and aluminium tariffs and stand down on his car tariff threat.

‘Not for long!’

Not to be daunted by Trump’s protectionism, Juncker last week toured Asia, signing the EU’s biggest ever trade deal with Japan while also backing multilateralism alongside the Chinese government during a stop in Beijing.

The EU – the world’s biggest single market with 28 countries and 500 million people – has also secured similar trade deals with US neighbours Canada and Mexico.

Also looming over the Juncker visit is last week’s decision by the commission to slap US tech giant Google with a record fine over its Android mobile phone operating system.

Trump lashed out at the €4.34 billion ($5 billion) penalty and warned: “They truly have taken advantage of the US, but not for long!” Trump said.

Trump threatens EU for 'taking advantage' of the US

US President Donald Trump yesterday (19 July) criticised the European Union over a record $5 billion fine EU antitrust regulators imposed on Google, saying the bloc was taking advantage of the United States.

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