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Trump to meet EU's Juncker in bid to resolve trade dispute

International Business
Wed, 25 Jul 2018
AFP


Washington: US President Donald Trump is due to meet Wednesday with European Commission President Jean-Claude Juncker in a bid to resolve a festering trade dispute between the two key economies.

Trump on Tuesday crowed that it was his tough stance and threats of auto tariffs that brought the European leader to the bargaining table.

But at home, Trump is facing increasing criticism as consumers, farmers and businesses are taking a hit from the retaliation to the raft of US tariffs on steel, aluminum, and tens of billions of dollars in products from China that he has imposed in recent weeks.

"What the European Union is doing to us is incredible," he said. "They sound nice, but they're rough."

But when threatened with tariffs on autos and auto parts, EU officials rushed to come to Washington, Trump claimed.

"Countries that have treated us unfairly on trade for years are all coming to Washington to negotiate," he said in a pre-dawn tweet. "Tariffs are the greatest!"

While Juncker is set to make a last effort to talk Trump out of the auto tariffs, which would hit Germany's dominant carmakers hard, the EU has vowed a withering response if the US goes ahead.

Brussels already retaliated against the steel and aluminum tariffs, imposing punitive duties on over $3 billion of US goods, including blue jeans, bourbon and motorcycles, as well as orange juice, rice and corn.

"We will continue to respond toe-to-toe to provocations," Juncker warned.

White House economic advisor Larry Kudlow said last week that Juncker could be coming to Washington with a "very important free trade offer," but the Commission dismissed that idea.

French Finance Minister Bruno Le Maire said over the weekend: "We refuse to negotiate with a gun to the head."

EU Trade Commissioner Cecilia Malmstrom, who will accompany Juncker, expressed hope for a "de-escalation" of the tensions, but said the EU is drawing up a list of more US products that could be hit with retaliatory duties if the trip fails.

Canada, Mexico and China -- the main target of Trump's trade offensive -- also have hit back with steep duties on US goods, and have filed complaints against Washington at the World Trade Organization.

While the US claims the retaliation is "illegal," the Trump administration recognized that it is doing damage to American farmers.

The Agriculture Department announced it will provide up to $12 billion in aid to farmers hurt by trade tariffs.

In an ironic tweet, Trump mocked his European trading partners.

"The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies!" he wrote.

"That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won't!"

But more voices even in Trump's own Republican Party are coming out against his confrontational stance.

Republican Senator Ben Sasse, a frequent Trump critic, said the president's trade policies recalled a past of perilous economic instability.

"This administration's tariffs and bailouts aren't going to make America great again, they're just going to make it 1929 again," he said in a statement.

And Senator Rand Paul tweeted that "Tariffs are taxes that punish American consumers and producers. If tariffs punish farmers, the answer is not welfare for farmers - the answer is remove the tariffs."

While he opposes tariffs and would prefer the administration use "better tools" to address unfair trade practices, Republican House Speaker Paul Ryan said the confrontation could produce beneficial results.

"This friction that we're having, as long as it results in lowering barriers... that's great, that is hopefully where we can end up with this."

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