Juncker and Trump’s trade truce falters

Car tariffs are back on the agenda as US accuses Europe of delaying trade talks.

U.S. President Donald Trump and European Commission President Jean-Claude Juncker previously met on July 25, 2018 in Washington, D.C. | Win McNamee/Getty Images

Europe’s fragile peace deal with the U.S. on trade is at breaking point.

Washington is again threatening high tariffs on Europe’s all-important car industry just as U.S. President Donald Trump is seeking to whip up support before midterm elections on November 6.

In an unusually outspoken attack, two top U.S. officials on Wednesday made clear that Trump is growing frustrated with Europe’s foot-dragging over a promised trade deal, and is gearing up to roll out car tariffs put on ice in July.

U.S. Commerce Secretary Wilbur Ross, who was in Brussels on Tuesday and Wednesday, was visibly annoyed by the lack of progress in talks and lashed out at the explanation given by EU trade chief Cecilia Malmström.

The openly hostile remarks from Ross and U.S Ambassador to the EU Gordon Sondland are a sign that the trade truce secured by European Commission President Jean-Claude Juncker on a visit to the White House in July is now faltering.

In that deal, Washington agreed to hold off car tariffs on the understanding that both parties would work quickly toward a broader EU-U.S. trade deal. On Wednesday, however, the two officials accused Malmström of treading water.

Referring to his Tuesday talks with Malmström, Ross said he warned her that he would only hold fire on new tariffs on Europe for “as long as talks are going satisfactorily.”

He then suggested, however, that the commissioner from Sweden is taking too long.

“This is not meant to be a five-year project: This is meant to be something that was to move quickly and in a cooperative fashion.” He also complained that Malmström is too far from opening real negotiations. Ross said: “Maybe she’ll think about doing a scoping exercise and maybe after the scoping exercise there’ll be some negotiations,” a reference to the EU’s multistage approach to negotiations.

When asked whether he had prepared the market study that would enable him to launch sanctions against the European auto industry, Ross hinted the U.S. is ready to strike. “The study will be ready when it’s needed and that’s as far as I’m prepared to go today,” Ross said.

Sondland, the ambassador, was even blunter in his assessment of the EU’s pace. He suggested Malmström and her team could be deliberately stalling and charged her team with “complete intransigence.”

“I don’t know whether the delays are purposeful, whether they are part of a plan to potentially wait out the term of President Trump. As far as I’m concerned President Trump will be the president of the United States until 2024 and I think it’s a futile exercise to do that,” he added.

Sondland also contradicted Malmström’s view that agriculture should be left out of the negotiations: “It was the full expectation of the president that agriculture would be discussed in the final negotiations,” he said.

Ross also insisted that the U.S. is keen to explore “all sectors where there are protectionist things now.”

In total contrast to the U.S. position, Malmström had earlier on Wednesday accused the U.S. of showing no sincere interest in talks.

“We have not started negotiating yet,” she said. “We have asked, and said that we are prepared, several times, to start the scoping exercise on a limited agreement focused on industrial goods on tariffs there. So far the U.S. has not shown any big interest there, so the ball is in their court.”

These comments irritated Ross, who said: “If the quotes are accurate they would appear to us as though she was at a different meeting from the one that we attended.”

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