What is the probability of resolving the US-EU trade rift?Hope may overtake progress

Washington – President Joe Biden has vowed to restore US trade relations with European allies that have been pushed to the limit by President Donald Trump’s benevolent actions, combat policy, and aversion to multinational alliances.

But when he meets with European Union leaders in Brussels on Tuesday, Biden may find it difficult to make up for. The prospect of forming an agreement to resolve their differences-and perhaps forming a united front against increasingly conflicting China-may be hampered by European skepticism.

After hearing a sour note about Biden’s intentions, Latvian political leader Valdis Dombrovski, who is responsible for trade in the European Union, said in a speech last week, “It’s time for the United States to speak.” It was.

Dombrovsky partially mentioned Trump’s 2018 decision to impose import taxes on foreign steel and aluminum. This decision infuriated European leaders and triggered retaliation against the United States. Biden took time to address the possibility of reducing tariffs imposed by Trump under “national security.”


And as trade tensions still obscure transatlantic relations, the EU may also hesitate to participate in a US-led effort to confront China over provocative trade policies.

Then there is a long-standing debate about how much government subsidies each side will unreasonably provide to its aircraft-manufacturing giants, Boeing in the United States and Airbus in the EU.

“This has been going on for 17 years,” says Cecilia Malmström, a veteran of the cross-Atlantic battle as a European trade commissioner from 2014 to 2019.

That said, US-EU relations regularly accused Europeans of neglecting to pay for their defenses through NATO and misusing what he called an unfair trade deal to sell far. There is no doubt that it is much more friendly than under Trump, who accused him of sending more products to the United States than they buy.

In a well-meaning gesture in March, the Biden administration and the EU agreed to suspend tariffs imposed on each other in the battle between Airbus and Boeing. Several media outlets call for US and EU diplomats to resolve the Boeing-Airbus dispute by July 11 and lift US steel and aluminum tariffs and EU retaliatory sanctions. It reports that it is working on a draft. December 1st.


The Biden administration also announced on Friday that Secretary of Commerce Gina Raimondo will join the US delegation. Her department manages tariffs on steel and aluminum.

Kelly Ann Shaw, a former Trump administration trade official and now a partner at law firm Hogan Lovells, has suggested that the EU and the US want to overcome the tariff battle. The least of them is China. “

But last week, Biden’s National Security Adviser Jake Sullivan sounded uncommitted when talking to Air Force One reporters.

“These negotiations are going well, but we haven’t promised anything about what will happen,” Sullivan said of the Boeing-Airbus dispute.

Regarding US steel and aluminum tariffs, Mr Sullivan said last month that the EU had agreed to suspend plans to raise retaliatory tariffs on US products. This is a concession aimed at relieving tensions and facilitating further negotiations. But he added, “it will take some time to work.”


Sullivan shook his head when asked specifically whether the United States would reduce metal tariffs.

The steel and aluminum controversy is particularly sensitive. To tax imported metals, Trump dispelled weapons that are rarely used in US trade policy to justify tariffs: he said foreign metals threatened US national security. Declared that there is.

“Almost all EU member states were NATO members,” said Malmstrom, who is now a senior researcher at the Peterson Institute for International Economics. “How can it pose a national security threat? It was unpleasant.”

Malmstrom said he was surprised that Biden hadn’t cut tariffs yet and hoped to cut them at the summit on Tuesday.

“Maybe he’s saving this as a gift,” she said.

Complicating Biden’s political calculations are US trade unions and steel and aluminum producers, some concentrated in states important to democratic election prospects, to maintain prices. That is why we want to maintain tariffs on imported metals. The main reason is that China, which mass-produces more than half of the world’s steel, contributes to the oversupply and, without it, pushes global prices down.


Demonstrating the unified challenges of the US and EU to China’s aggressive policies could enhance the leverage of cross-Atlantic negotiations. But Malmstrom said he was skeptical about whether the EU was eager to confront China and join the United States to force calculations about its trade practices.

The Trump administration imposed tariffs on $ 360 billion of Chinese goods in the context of a fierce conflict over predatory tactics that has been widely accused of China’s attempt to replace US global technological dominance. I made it. Many trade experts have forced Beijing to hand over corporate secrets to U.S. companies as the price of access to their markets, forcing U.S. companies to license Chinese technology at a disadvantage, and state funding. He says he used to buy US technology and commit a complete theft.

Critics, including Biden, have accused Trump of alienating potential allies like the EU instead of having them join in to support the challenge to Beijing. But so far, Biden has not stopped Trump’s trade war with China.


Among the 27 EU member states, Malmstrom said, “There is no perfect agreement on how to deal with China.” She suggested that the EU could work with the United States on certain measures. For example, however, it has not yet joined the United States in a widespread conflict with China.

“The EU isn’t just about finally signing up for the US agenda,” she said. “The EU is not in trade war mode against anyone.”


AP writer Aamer Madhani contributed this report from Carvis Bay, England.

Copyright 2021 AP communication. all rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

What is the probability of resolving the US-EU trade rift?Hope may overtake progress

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