The EU sees the way to negotiate with Trump to avoid a tariff struggle

Ian Lee of Carleton University says that Trump’s vision is “daring” and “radical”, and his goal is to reform the world economic system.

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The European Union is preparing for a transatlantic commercial struggle, but the decision of American president Donald Trump to delay the general prices on Mexico and Canada this week has strengthened confidence in the block according to which it will be able to negotiate a result acceptable.

Trump’s reversal in the Americas has informed the European Commission’s strategy, the EU executive branch which is in charge of commercial issues, to prepare a proportional answer to the president’s tariff threats so as not to provoke the anger of Washington, according to a person familiar with the thought of the block.

But a major obstacle in the EU strategy is that it has not been able to establish good contacts in the emerging American administration, said that the person, who spoke subject to anonymity. Certain key commercial positions in Washington are still awaiting the approval of the Senate.

The EU will also seek to defuse a brewing conflict with the United States on steel and aluminum exports that should come to the head next month, the person said.

Trump increased his rhetoric intended for the EU this week, saying that the prices “will certainly occur”, citing a large trade deficit with the block. Bloomberg reported earlier that the Commission had prepared large reprisals in case the United States advances with the threat.

“When it is targeted, unjustly and arbitrarily, the European Union will respond firmly,” the chairman of the Ursula von der Leyen commission said on Monday after a meeting of EU leaders in Brussels on Monday.

We do not know what Trump wants from the EU and his anger towards Europe, there is far, so a solution could be more difficult to drop out.

Bloomberg reported earlier that the Commission had prepared an offer to improve bilateral relations with the United States which would include more imports of liquefied natural gas, fertilizer and weapons. Other areas of potential collaboration include a closer alignment with China around export controls, investment projections and work together to combat the overcapacity of China, in particular in the steel sector .

The commission plans to follow a game book similar to its latest commercial confrontation with the United States in 2018 and will target politically sensitive constituencies in the United States for the prices, the person said. During a meeting of commercial ministers in Warsaw on Tuesday, the Commission shared some ideas with the Member States on the reprisal package.

Trump approved prices up to 25% on the goods of Canada and Mexico, and after telephone calls with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau, suspended them for a month.

Some capitals consider that respect as a positive signal that homework is not Trump’s final objective, but part of the negotiations, the person said.

Steel prices

At the end of March, EU suspended rates of about $ 3 billion in American products are expected to recover. This particular fight began in 2018 when the United States struck nearly $ 7 billion in European steel and aluminum exports with tasks, citing national security problems.

The block retaliated by targeting politically sensitive companies with reprisal tasks, including Harley-Davidson Inc. Motorcycles and Levi Strauss & Co. Jeans.

The two parties agreed with a temporary truce in 2021, when the United States partially eliminated its measurements and introduced a set of price rate quotas above which the functions on the metals are applied, while the EU frozen all its restrictive measures. The American quotas that replaced punitive tasks will expire at the end of the year.

The EU will probably extend the suspension of these prices after the deadline of March to avoid provoking the US administration and maintain a positive approach, depending on the person.

“Thanks to a constructive commitment and a discussion, we can solve this problem,” the EU commerce chief Maros Sefcovic said on Tuesday at a meeting of the Bloc ministers. “But at the same time, it is very clear that we are unjustly or arbitrarily hit, we will respond firmly.”

– With the help of Alberto Nardelli, by Zoe Schneeweiss, Andrea Palaciano and Kevin Whitelaw.

(Updates with Maros Sefcovic Comment in the final paragraph.)