EU green lights US trade talks amid tariff threats
- The Council of the European Union on Monday authorized trade talks with the U.S. to seek the elimination of tariffs on industrial products. The negotiations follow through on a joint statement made last July by EU Commission President Jean-Claude Juncker and Donald Trump to work toward zero tariffs.
- The EU's opening of negotiations follows a U.S. proposal last week to put tariffs on $11 billion worth of imports from the EU following a dispute over aircraft subsidies. In response, the European Commission reportedly drafted a list of tariffs on 20 billion Euros ($22.6 billion) of U.S. imports, according to Reuters.
- The EU Council said it would unilaterally suspend negotiations if the U.S. put further trade restrictions on European products.
???????????????? With today’s adoption of the negotiating directives for trade talks, #EU is delivering on what @realDonaldTrump and I have agreed. Slashing tariffs on industrial products could lead to additional increase in EU and U.S. exports worth €26 bn. #WinWinhttps://t.co/MjqiM9op4M pic.twitter.com/eFRHmdnx00— Jean-Claude Juncker (@JunckerEU) April 15, 2019
The EU Council's move to begin formal trade talks with the U.S. is several months in the making and separate from the recent U.S. threat to impose tariffs on $11 billion worth of goods.
The coincidental (or not) timing of the latest tariff threat further escalates tensions between the two trade blocs and could cast a shadow over the negotiations.
The EU Council laid out requirements for the negotiations: The talks won't conclude as long as tariffs on steel and aluminum remain in place, and the EU can suspend negotiations if the U.S. adds trade restrictions (such as the proposed tariffs) to European goods. Any violation of these parameters could quickly unravel the talks.
The subsidies to Airbus and Boeing are the latest in a saga of escalating tensions since the July 2018 agreement to seek zero tariffs. The U.S. and EU reportedly disagreed on how to proceed with the trade talks and what exactly was agreed upon at the meeting, Bloomberg reported.
EU Trade Commissioner Cecilia Malmström said agriculture would not be part of the negotiations. The EU Commission's announcement from today said trade talks would exclude agricultural products.
Gordon Sondland, U.S. ambassador to the EU, said agriculture was "absolutely discussed" during the meeting in July. A joint statement from Juncker and Trump said the leaders will look to increase trade "in "services, chemicals, pharmaceuticals, medical products, as well as soybeans." Soon after, Trump tweeted "European Union representatives told me that they would start buying soybeans from our great farmers immediately."
It's unclear when the trade talks will formally begin. The EU is expected to publish a proposed list of U.S. imports subject to tariffs this Wednesday, according to Reuters.
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