Possibility of settling US-EU trade rifts? Hope can outweigh progress

Yet when he meets with EU leaders in Brussels on Tuesday, Biden may seem that is difficult to make. The prospect of finding a compromise to resolve their differences – and perhaps forging a united front against an increasingly confrontational China – could be hampered by European skepticism.

In what seems to be a sour note about Biden’s intentions, Valdis Dombrowski, a Latvian political leader who serves as the EU’s trade chief, said in a speech last week that “the time has come for America to talk”. Has gone.”

Dombrowski was referring in part to Trump’s 2018 decision to impose import taxes on foreign steel and aluminum – a decision that has furious European leaders and retaliatory moves against the United States. Biden has been slow to take on the prospect of dropping tariffs imposed by Trump on “national security” grounds.

And with trade tensions still overshadowing trans-Atlantic ties, the EU may also prove reluctant to join a US-led effort to confront China over its provocative trade policies.

Then there is a longstanding dispute over how much each side unfairly provides government subsidies for its aircraft manufacturing giant – Boeing in the United States and Airbus in the European Union.

“This has been going on for 17 years,” says Cecilia Malmström, a veteran of trans-Atlantic battles as European Trade Commissioner from 2014 to 2019.

All that said, US-EU relations are still certain to be a lot friendlier than Trump, who has regularly accused Europeans of taking responsibility for paying for their defense through NATO and selling away. accused of exploiting unfair trade deals. More products than they buy in the United States.

In a goodwill gesture in March, the Biden administration and the European Union agreed to suspend tariffs imposed on each other in the Airbus-Boeing battle. Several news outlets have reported that US and EU diplomats are working on a draft communiqué that would call for the Boeing-Airbus dispute to be extended until July 11 for US steel and aluminum tariffs and for the lifting of EU retaliatory sanctions. December 1.

The Biden administration also announced Friday that Commerce Secretary Gina Raimondo would join the US delegation; His department manages the steel and aluminum tariffs.

Kelly Ann Shaw, a former Trump administration trade official who is now a partner at the law firm Hogan Lovells, suggested that the EU and the US are eager to move on from their tariff battle “so that they can move forward and look forward to the 21st century”. challenges, not the least of which is China.

Last week, however, Biden’s national security adviser, Jake Sullivan, sounded noncommittal in speaking with reporters on Air Force One.

Regarding the Boeing-Airbus dispute, Sullivan said, “Those talks have made good progress. But I’m not making any promises about what might happen.”

Regarding US steel and aluminum tariffs, Sullivan said the EU had last month agreed to suspend plans to raise retaliatory tariffs on US products – a concession intended to ease tensions and encourage further negotiations. . But he added: “It will take some time to work it out.”

Asked specifically whether the United States would withdraw metal tariffs, Sullivan shook his head.

The steel and aluminum dispute is particularly sensitive. To tax imported metals, Trump dusted off a little-used weapon in U.S. trade policy to justify tariffs: He declared foreign metals a threat to U.S. national security — a decision that prompted European and shocked and angered other longtime American allies. .

“Almost all EU members were NATO members,” said Malmström, who is now a senior fellow at the Petersen Institute for International Economics. “How can we be a threat to national security? It was objectionable.”

Malmstrom said she was surprised Biden had not already lowered tariffs and expected to do so at Tuesday’s summit.

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

Complicating the political calculations for Biden is that US labor unions and steel and aluminum producers – some of them concentrated in states crucial to Democratic election prospects – want to maintain tariffs on imported metals to help keep prices up. Huh. One major reason is that China, which produces more than half of the world’s steel, has contributed to the excessive supply that has otherwise kept global prices down.

A demonstration of a joint US-EU challenge to China’s aggressive policies could strengthen trans-Atlantic dialogue leverage. But Malmstrom said he is skeptical about whether the EU is eager to join the United States in confronting China and forced to put an account on its trade practices.

The imposition of tariffs on $360 billion of Chinese goods by the Trump administration came against the backdrop of a raging struggle over a violent strategy that China has widely accused of deploying to try to stifle the US’s global technological dominance. has gone. Many trade experts say Beijing has forced American companies to hand over trade secrets as the price of their market access, has forced American businesses to license technology in China on unfavorable terms, Used state money to buy and stole outright.

Critics, including Biden, had rebuked Trump for isolating allies such as the European Union instead of enlisting him to help challenge Beijing. For now, though, Biden hasn’t called off Trump’s trade war against China.

Malmstrom noted that among the 27 EU member states, “there is no absolute consensus on how to deal with China.” It suggested that the EU could go with the United States on specific measures – perhaps cracking down on Beijing’s subsidies to its own companies, for example – but still join the United States in any wider confrontation with China. prevent it from happening.

“The EU will not just sign an American agenda on the bottom line,” she said. “The EU is not in a trade war mode against anyone.”


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


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