President Trump and Jean-Claude Juncker at the White House on July 25. (Jim Lo Scalzo/Epa-Efe/Shutterstock)
BRUSSELS — European officials are struggling to make sense of what seems a temporary trade war truce between President Trump and the European Union, following the visit of E.U. leaders to Washington this week.
Trump and Jean-Claude Juncker, the president of the European Commission, announced Wednesday that they had agreed to work toward resolving disputes over steel and aluminum tariffs, delay proposed car tariffs and talk about a bilateral trade deal.
“Objectively this a good news, that we avoided so far tariffs on cars,” said a senior E.U. diplomat, who like many officials spoke on the condition of anonymity to discuss sensitive internal discussions.
In capitals across Europe, a number of national officials echoed that sentiment, heralding the meeting as having prevented a trade war. German Finance Minister Peter Altmaier, for instance, called it a “breakthrough.” But others were wary, wondering whether it’s realistic to expect Europe to buy more soybeans from the United States, as Juncker signaled, or to become “a massive buyer” of U.S. liquefied natural gas, as Trump declared.
And to some European eyes, the more feasible parts of what Trump and Juncker discussed look a lot like the goals of what was known as the Transatlantic Trade and Investment Partnership, or TTIP, an initiative launched by President Barack Obama that aspired to free trade with Europe.
Wednesday’s joint statement between Juncker and Trump included calls for easing trade barriers in sectors such as pharmaceuticals, chemicals, medical products and services — sectors that also were discussed within TTIP. Those negotiations have been mostly dormant since 2016, when they were sidetracked by Britain voting to leave the European Union and the United States electing Trump.
“TTIP was way too wide, and negotiations were stuck, as Americans were not keen to discuss greater access to their public procurements, while Europeans were reluctant on the U.S. importing more agricultural products,” said a European Commission official.
According to another diplomat, some countries fear that communicating a revival of TTIP could anger voters. From the beginning, the E.U.-U.S. trade proposal triggered resistance from social and environmental activists. Reopening talks during a Trump presidency could backfire, as the next elections for the European Parliament are scheduled for May 2019.
With a White House that frequently changes course and on the spur of a moment, economic analysts hesitated to cast any definitive judgment on the Trump-Juncker detent.
“Is it actual, or is it just perfunctory?” said Maria Demertzis, the deputy director of Breugel, a Brussels-based think tank focusing on economic issues.
As far as soybean imports, prices from Argentina and Brazil tend to be a good deal lower than prices from the United States, according to an E.U. official.
U.S. prices have fallen somewhat in recent weeks, since China enacted its own set of soybean tariffs. But soybeans intended for Chinese markets can’t necessarily be redirected to the European Union, which has stringent regulations on genetically modified foods.
According to a senior E.U. official, there have been no discussions about lifting those standards to purchase U.S. soybeans. The same official said that agricultural products were outside the talks between Juncker and Trump, directly contradicting comments from Commerce Secretary Wilbur Ross, who said Tuesday that “all agricultural products are something that will be discussed.”
“Ross can say what he wishes, but it does not correspond to the joint statement,” the diplomat said.
A similar situation exists regarding liquefied natural gas, said a European diplomat working on trade issues. That provision probably was meant as a German concession to the White House, the diplomat said, given Trump’s recent anger about the Nord Stream 2 pipeline deal, which will bring gas to Germany from Russia.
Nord Stream 2 hasn’t been abandoned, though. And U.S. gas remains far more expensive because of shipping costs.
“The idea of significantly more LNG shipments to EU absurd,” tweeted Anthony Gardner, a former U.S. ambassador to the European Union. “It is not price competitive with piped gas.”
For some trade analysts, the concern was less about the particulars of the Trump-Juncker handshake this week than how Europe plans to deal with Trump, who only recently called the European Union a “trade foe.”
“Let’s go back a step,” said Demertzis, the economic analyst. “What’s the strategy here, to the extent that the E.U. has a strategy?”
She noted that the bloc has recently signed major trade deals with other partners, notably Japan. Meanwhile, it’s contesting the Trump administration’s steel and aluminum tariffs — which remain in effect — before the World Trade Organization, and it has pledged proportionality in retaliatory measures toward U.S. products.
“If you go and strike a deal with Mr. Trump, you have to think how that fits into the strategy,” she said. “Striking a deal would do damage, in my view, to what you’re trying to do on a broader level.”
McAuley reported from Paris.
