US President Donald Trump hosted the EU's Jean-Claude Juncker on Wednesday in an effort to resolve a festering trade dispute, as the European Commission chief stressed the key economies are "not enemies." Tensions spiked leading up to the high-stakes Oval Office talks with Trump sending a series of tweets assailing the European Union's trade practices, while Juncker warned he was holding out little hope of a compromise.
But with the United States threatening to impose punishing new tariffs on EU auto exports, Juncker struck a conciliatory note as the meeting got underway, stressing: "We are close partners, allies - not enemies." "We have to work together. We are representing half of world trade," Juncker said as he sat beside Trump in the Oval Office, thanking him for "taking the initiative to invite us to the White House."
Trump meanwhile said he expected "something very positive" to come from the talks, while repeating his call for "reciprocal" trade and complaining the EU has erected "massive barriers and massive tariffs." "Over the years the United States has been losing hundreds of billions of dollars with the European Union and we just wanted it to be a level playing field for farmers, manufacturers, for everybody," Trump said. Speaking ahead of the meeting, Juncker had admitted he was "not very optimistic," and renewed a promise of immediate retaliatory measures should Trump make good on a threat to slap new tariffs on EU car imports.
Trump crowed Tuesday that his latest threat had brought Europe to the negotiating table and called on both sides to "drop all Tariffs, Barriers and Subsidies!" But the US president is facing increasing criticism as consumers, farmers and businesses take a hit from the retaliatory measures imposed to counter the raft of US tariffs on steel, aluminum, and tens of billions of dollars in products from China put in place in recent weeks.
Chinese President Xi Jinping on Wednesday warned that there would be "no winner" in any global trade war. But Trump remained defiant ahead of Wednesday's talks. "Are we just going to continue and let our farmers and country get ripped off? Lost $817 Billion on Trade last year. No weakness!" he tweeted. That figure apparently refers to the US trade deficit in goods alone last year, which hit $810 billion last year, while the total deficit including services was $566 billion.
EU Trade Commissioner Cecilia Malmstrom, who is accompanying Juncker, said the EU is drawing up a list of $20 billion in US products to be targeted for retaliation if the trip fails. "We hope that this won't happen and that we can reach a solution," Malmstrom told the Swedish daily Dagens Nyheter (DN). She said the "long list" of American goods would include machinery, agricultural and high-tech products, among others, if they are unable to talk Trump out of the auto tariffs, which would hurt Germany's dominant carmakers.
Brussels already retaliated against the steel and aluminum tariffs, imposing punitive duties on more than $3 billion of US goods, including blue jeans, bourbon and motorcycles, as well as orange juice, rice and corn. Canada, Mexico and China - the main target of Trump's trade offensive - have also hit back with steep duties on US goods, and have filed complaints against Washington at the World Trade Organization. While the US claims the retaliation is "illegal," the Trump administration has acknowledged it is doing damage to American farmers, and announced Tuesday it will provide up to $12 billion in aid to farmers hurt by trade tariffs.
WTO Director-General Roberto Azevedo said Wednesday he is hoping to "stop this trend" of growing restrictions on trade. A new WTO report showed global trade covered by measures to restrict imports reached $84.5 billion in May as compared to $79 billion in October, with 75 new actions imposed in that time period. "We are heading in the wrong direction, and we seem to be speeding up. Growth, jobs and recovery are at stake," Azevedo warned. Trump's confrontational stance is fueling concern within his own Republican Party, with more and more members speaking out.
Republican Senator Ben Sasse, a frequent Trump critic, said the president's trade policies recalled a past of perilous economic instability. "This administration's tariffs and bailouts aren't going to make America great again, they're just going to make it 1929 aggain," he said in a statement Republican House Speaker Paul Ryan sounded a more supportive note, however, saying that while he would prefer the administration use "better tools" to address unfair trade practices, the confrontation could also produce beneficial results. "This friction that we're having, as long as it results in lowering barriers... that's great," Ryan said.
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