Trump revives trade battle with Europe

January 23, 2020

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DAVOS: US President Donald Trump, fresh from calling a trade truce with China, threatened on Wednesday to impose crippling tariffs on European autos unless the EU budges on a transatlantic deal.

The European Union talked up hopes for such an accord, while France signalled progress in a row over a new tax that seeks a fairer share of the titanic profits amassed by US tech companies.

Britain, however, vowed to press ahead with its own digital tax targeting the likes of Amazon, Facebook and Google, despite the potential impact on its hopes of forging a trade deal with the United States as it exits the EU.

Trump, attending the World Economic Forum in Davos as his Senate impeachment trial unfolds back home, revived a long-running offensive against the EU a day after dismissing climate campaigners as “prophets of doom”.

“The European Union is tougher to deal with than anybody. They’ve taken advantage of our country for many years,” Trump told Fox Business News.

“Ultimately, it will be very easy because if we can’t make a deal, we’ll have to put 25 percent tariffs on their cars,” he added.

There was no immediate response from Germany, Europe’s biggest auto exporter. The price of high-end brands such as BMW and Audi risks spiralling beyond consideration for many American drivers if Trump goes through with the threat.

But European Com­mission chief Ursula von der Leyen emerged from a “very good conversation with” the president in Davos sounding upbeat about the prospects of a deal covering trade, technology and energy.

“We are expecting in a few weeks to have an agreement that we can sign together,” she said.

Trump said his attention was turning to Europe after he sealed a ceasefire on trade with China this month.

That cooled a destabilising tariffs war Trump ignited between the two biggest economies, after he took office vowing also to rewrite a North American accord and overhaul the World Trade Organisation (WTO).

“I wanted to wait till I finished China, to be honest with you. I always like to be very transparent. I wanted to wait till I finished China. I didn’t want to go with China and Europe at the same time,” he said.

Trump said “very dramatic” action to reform the WTO was in the works, after he paralysed its dispute settlement process by refusing to name new judges to the Geneva-based body, arguing it is biased against the United States.

The US and EU agreed to pursue a trade deal in July 2017 as a tentative truce after Trump had taken office and declared a war on America’s yawning trade deficits with China and Europe.

Published in Dawn, January 23rd, 2020