President Donald Trump meets with the President of the European Commission Jean-Claude Juncker in the Rose Garden of the White House in Washington on July 25, 2018. (Samira Bouaou/The Epoch Times)

The United States and the European Union declared a “new phase” in relations in reaching a trade deal and putting brakes on escalating tension, with German leaders hailing the agreement as an important step that benefits both sides of the Atlantic.

The DAX, Germany’s blue-chip stock market index, jumped 1.8 percent the day after the announcement. European shares also climbed, rising to a six-week high. The pan-European STOXX 600 index rose almost 1 percent on the news.

On July 25, Trump and European Commission President Jean-Claude Juncker agreed to work together to eliminate tariffs and other trade barriers on all industrial goods other than cars. Both leaders also agreed to cooperate against unfair Chinese trade practices and reform the World Trade Organization (WTO).

The Trump administration agreed to put on hold any new tariffs, while the EU pledged to increase imports of American soybeans and liquefied natural gas (LNG).

There was huge relief expressed in Germany, the EU’s export powerhouse. Chancellor Angela Merkel said in a tweet through her spokeswoman that she welcomed the agreement, and that the EU Commission could “count on our continued support.”

According to Germany’s foreign minister, Heiko Maas, the result was well above expectations.

“This is still not the outcome that we are aiming for,” he told reporters in Seoul. But “it has made a positive outcome more likely than it was beforehand.

“America and Europe are not opponents. … We are partners and allies with common values and interests,” he said, adding it was good that both sides agreed to resolve unfair trade practices and reform the WTO.

German economic minister Peter Altmaier applauded both Trump and Juncker.

“Breakthrough achieved that can avoid trade war & save millions of jobs! Great for global economy,” he wrote on Twitter after the announcement.

Trade and investment flows between the United States and the EU create the world’s biggest economic relationship. The economies have a trillion-dollar bilateral trade relationship and account together for about half of the world’s GDP.

The German Association of the Automotive Industry (VDA) welcomed the agreement, calling it “a big step.”

“The automotive industry regards the removal of import duties and non-tariff trade barriers on both sides as the right path to take,” VDA President Bernhard Mattes said in a press release. He urged the leaders to commence negotiations quickly and put the agreement into practice.

“The United States is a strategically important market and production location for the German manufacturers and suppliers,” Mattes said.

German carmakers, including BMW, Daimler, and Volkswagen, operate more than 300 U.S. plants and employ more than 118,000 people. And they build more than 800,000 vehicles per year in the United States, with over half of those exported to Europe, Asia, or the rest of the world, according to the VDA release.

Mattes also welcomed the intention to remove non-tariff trade barriers between the EU and the United States.

As part of the deal, both leaders agreed to establish a dialogue on standards to ease the non-tariff barriers and to lower costs.

U.S. exporters face challenges in accessing the EU market, as many of their products that conform to international standards cannot meet strict EU standards.

“The mutual recognition of standards, and regulatory cooperation eliminate unnecessary bureaucracy and reduce costs,” Mattes said, adding this would create more opportunities to small and medium-sized companies in particular, and boost competition.

Germans have been particularly concerned about the trade war, as Trump specifically focused on German carmakers in tweets that were critical of the  EU’s high barriers to American cars. The EU applies a 10 percent tariff on passenger vehicles, whereas the United States imposes a maximum 2.5 percenttariff on imported cars.

Trump earlier asked EU leaders to scrap all tariffs and non-tariff barriers to American cars imported into the bloc. He said he would otherwise impose a 20 percent tariff on all EU cars coming to the United States.

Under the new deal, both sides agreed to halt any new tariffs for now, including on autos, pending the outcome of negotiations.

However, not everyone is happy with the result. According to critics, the EU only managed to achieve delaying new tariffs, while existing tariffs on steel and aluminum imposed by both sides would not be lifted but “re-examined” for the time being.

The critics also say the EU made actual concessions, promising to boost its imports of soybeans and LNG.

“What Mr. Juncker achieved over there was not a success,” Bernd Lange, a trade expert for the SPD party, told German public radio. He criticized Juncker for caving to Trump’s demands and failing to halt tariffs on steel and aluminum.

U.S. Commerce Secretary Wilbur Ross told reporters on July 26 that steel and aluminum tariffs would remain in place during the negotiations. Ross also said Trump had directed him to “continue the investigation” into auto tariffs, adding that the investigation report would be completed in August.

According to the Financial Times, Mark Rutte, prime minister of the Netherlands, was among the leaders who welcomed the US-EU agreement, saying that it was “very important” cooperation.

However, French President Emmanuel Macron was more cautious, saying Paris would seek “clarifications” on the agreement.

“Europe and France never wanted a trade war and the talks yesterday were, therefore, useful” in reducing the tension, he told reporters after a meeting with Spanish Prime Minister Pedro Sanchez in Madrid on July 26.

According to the AFP, Macron opposed including agriculture in any trade deal with the United States.

“I believe that no European standard should be suppressed or lowered in the areas of the environment, health or food, for example,” he said.

Source: https://www.theepochtimes.com/us-eu-trade-deal-welcomed-by-german-leaders_2608137.html

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Mark Muller (righT) works with fellow traders on the floor of the New York Stock Exchange Thursday. Stocks are off to a mostly lower start on Wall Street as losses for banks and consumer products makers offset gains for technology companies. | AP

WASHINGTON/WHISTLER, BRITISH COLUMBIA – The Trump administration said Thursday it will impose tariffs on steel and aluminum imports from Europe, Mexico and Canada after failing to win concessions from their American allies. Europe and Mexico pledged to retaliate quickly, exacerbating trans-Atlantic and North American trade tensions. Financial markets fell amid fears of a trade war.

The import duties threaten to drive up prices for American consumers and companies and are likely to heighten uncertainty for businesses and investors around the globe.

In the Canadian resort town of Whistler, British Columbia, Finance Minister Taro Aso pushed U.S. Treasury Secretary Steven Mnuchin to have Japan permanently exempted from Washington’s metals tariffs.

Tokyo is also considering countermeasures if it is not granted an exemption.

According to Japanese government officials, Aso also asked the U.S. to exercise restraint when considering new automobile tariffs, after the U.S. Commerce Department last week launched an investigation into imported cars, trucks and auto parts.

Aso told Mnuchin that steel and aluminum imports from Japan do not pose a national security threat to the United States, the rationale provided by President Donald Trump when he announced the levies in March.

Thursday’s talks between Aso and Mnuchin were held ahead of a conference of the Group of Seven economies at the Canadian ski resort.

Canadian Finance Minister Bill Morneau said Washington’s trade policies would be at the top of the agenda during the three-day meeting of finance ministers and central bank governors from Britain, Canada, France, Germany, Italy, Japan and the United States.

In Paris, trade minister Hiroshige Seko and EU Trade Commissioner Cecilia Malmstrom issued a joint statement of protest, saying they “shared their serious concern.”

The two ministers also warned of the possible major impact if the United States imposes restrictions on automobile and auto part imports, measures now under consideration.

“This would cause serious turmoil in the global market and could lead to the demise of the multilateral trading system,” the statement said.

As for the products from Europe, Mexico and Canada, U.S. Commerce Secretary Wilbur Ross said the tariffs would be 25 percent on steel and 10 percent on aluminum, and go into effect Friday, as the administration followed through on the penalties after earlier granting exemptions to buy time for negotiations. Trump had announced the tariffs in March, citing national security concerns.

European Commission President Jean-Claude Juncker said Trump’s decision amounted to trade protectionism and that Europe will respond with countermeasures. “This is protectionism, pure and simple,” Juncker said. Mexico said it would penalize U.S. imports including pork bellies, apples, grapes, cheeses and flat steel.

“Donald Trump is a bully. And the only way to do deal with a bully is to stand up and push back,” Ontario Premier Kathleen Wynne said.

Financial markets dipped amid concerns about the disputes among trading partners, with the Dow Jones industrial average dropping more than 200 points.

The tariffs directed at some of the most ardent U.S. allies represented the latest move in Trump’s “America First” agenda that has roiled financial markets and raised the specter of a trade war involving the U.S., China and some of the globe’s most dominant economies.

The trade actions have opened the U.S. to criticism that it’s burning bridges at a time when Trump is seeking to rid North Korea of nuclear weapons and help stabilize the Middle East.

“We are alienating all of our friends and partners at a time when we could really use their support,” said Wendy Cutler, a former U.S. trade negotiator who is now vice president at the Asia Society Policy Institute.

Ross told reporters that talks with Canada and Mexico over revising the North American Free Trade Agreement were “taking longer than we had hoped.” Talks with Europe had “made some progress” but not enough for additional exemptions, he said in a conference call from Paris.

“We continue to be quite willing and indeed eager to have further discussions,” Ross said. He said he planned to travel to China on Friday for trade talks between the world’s two biggest economies.

European officials, bracing for the tariffs, have threatened to retaliate against U.S. orange juice, peanut butter, kitchenware, clothing and footwear, washing machines, textiles, whiskey, motorcycles, boats and batteries. The EU will decide exact countermeasures in the coming weeks, according to the French officials.

The EU said it would take legal action Friday through the World Trade Organization, setting in motion a process aimed at settling the dispute over the penalties. The EU move could increase pressure on Washington, but the process traditionally takes many months — and in some cases, years.

In terms of the NAFTA talks, the tariffs could hinder the negotiations among the North American neighbors. Ross said there was “no longer a very precise date when they may be concluded and therefore (Canada and Mexico) were added into the list of those who will bear tariffs.”

Brazil, Argentina and Australia have agreed to limit steel shipments to the U.S. in exchange for being spared the tariffs, the Commerce Department said.

Fears of a global trade war are already weighing on investor confidence and could hinder the global economic upturn. European officials argue that tit-for-tat tariffs will hurt growth on both sides of the Atlantic and Canada said before the announcement that it will respond in kind.

“Canada considers it frankly absurd that we would in any way be considered to be a national security threat to the United States,” Canadian Foreign Minister Chrystia Freeland said before the tariffs were announced. “The government is absolutely prepared to and will defend Canadian industries and Canadian jobs. We will respond appropriately.”

German Chancellor Angela Merkel stressed her opposition even before the U.S. announcement, saying the looming tariffs were incompatible with World Trade Organization rules. She said if there were no exemptions, “We will respond in an intelligent, decisive and joint way.”

French Finance Minister Bruno Le Maire called the U.S. tariffs “unjustified, unjustifiable and dangerous.”

“This will only lead to the victory of those who want less growth, those who don’t think we can develop our economies across the world. We think on the contrary that global trade must have rules in a context of multilateralism. We are ready to rebuild this multilateralism with our American friends,” he said.

Malmstrom, the EU’s trade commissioner, said the body “did everything to avoid this outcome.” Noting her discussions with U.S. officials, she said. “I have argued for the EU and the US to engage in a positive trans-Atlantic trade agenda, and for the EU to be fully, permanently and unconditionally exempted from these tariffs.”

Even some Trump allies in Congress said the trade moves were misguided. “Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers,” said Utah Republican Sen. Orrin Hatch. The conservative Koch brothers network’ also said it opposed the tariffs.

White House spokesman Raj Shah told Fox News: “The president’s actions are about protecting American steel, American aluminum. They’re critical for national security.”

Tariffs on steel and aluminum imports to the U.S. can help local producers of the metals by making foreign products more expensive. But they can increase costs more broadly for U.S. manufacturers that cannot source all their needs locally and have to import the materials. That hurts the companies and can lead to more expensive consumer prices, economists say.

“Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade. Nothing,” French President Emmanuel Macron said Wednesday.

In a clear reference to Trump, Macron added: “These solutions might bring symbolic satisfaction in the short term. … One can think about making voters happy by saying, ‘I have a victory, I’ll change the rules, you’ll see.’ ”

But Macron said those “who waged bilateral trade wars … saw an increase in prices and an increase in unemployment.”

Besides the U.S. steel and aluminum tariffs, the U.S. is also investigating possible limits on foreign cars in the name of national security.

Ross criticized the EU for its tough negotiating position. But German Economy Minister Peter Altmaier insisted the Europeans are ready to negotiate special trade arrangements, notably for liquefied natural gas and industrial goods, including cars.

Source: https://www.japantimes.co.jp/news/2018/06/01/business/stocks-tank-trade-war-looms-trump-slaps-tariffs-allies-eu-mexico-canada/#.WxEg1UgvxGM

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BRUSSELS – 28 May 2018: Germany is seeking to end a dispute between the United States and the European Union over President Donald Trump’s decision to impose high tariffs on steel and aluminum imports, Economy Minister Peter Altmaier said on Monday.

Altmaier said he would discuss the issue with European Trade Commissioner Cecilia Malmstrom and U.S. Commerce Secretary Wilbur Ross at a meeting of the Organization for Economic Co-operation and Development (OECD) in Paris this week.

“We need to try to avoid higher tariffs,” Altmaier said. Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum in March but the European Union has been granted exemptions until June 1.

Source:  https://www.egypttoday.com/Article/3/51046/Germany-seeking-deal-to-end-EU-U-S-trade-dispute

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