US economy

EU trade chief seeks to ease Washington tensions

The EU’s trade chief will head to Washington this week aiming to soothe tensions with the Trump administration, as the two sides spar over aircraft subsidies and digital tax.

Phil Hogan will meet US trade representative Robert Lighthizer and other senior administration officials on his first visit to Washington since he took office on December 1.

The visit, which begins on Tuesday, will coincide with the signing on Wednesday of a US-China trade agreement. Some in Brussels fear the thaw in relations between Mr Trump and Beijing could prompt the US president to intensify pressure on Europe.

The Irish politician has been outspoken in his criticism of Mr Trump, accusing him last year of “reckless behaviour” in using punitive tariffs to extract concessions from trading partners. Mr Hogan vowed at the time that the EU would “do everything we possibly can to get Mr Trump to see the error of his ways”.

But a European Commission spokesperson said on Monday that this week’s trip should be “a stepping stone in an effort to refresh and invigorate a positive transatlantic trade relationship”.

The EU and the US are rowing over digital tax after Washington threatened to hit $2.4bn of French exports with additional tariffs including cheese and champagne.

Washington has argued that Paris’ plan to tax tech giants discriminates against Google, Facebook and other US companies, while France insists the measure is a necessary stopgap until a taxation deal can be reached at international level.

Last week France and the US gave themselves two weeks to try to reach an agreement.

Other tensions have arisen because of a long-running EU-US dispute over subsidies to Airbus and Boeing, which last year led the US to impose additional tariffs on $7.5bn of EU products.

Brussels has emphasised its desire to move on from the disputes and forge a common agenda based around reforming and reinvigorating the World Trade Organisation so that it can address shared EU-US concerns, notably about unfair Chinese competition.

But Washington last year forced the suspension of the WTO’s highest dispute settlement body by blocking the appointment of new judges. The US has long complained that the appellate body over-reached its powers.

“The trip will present an occasion to identify common ground and hopefully potential solutions to some of the issues that we have been discussing over the past weeks and months,” said the commission spokesperson.

Washington and Beijing are set on Thursday to unveil their “phase one” trade deal, which has raised hopes in global markets that the US-China trade war may have peaked.

The EU and US agreed in 2018 on plans for trade talks. But they have made no progress on their goal of scrapping tariffs on industrial goods after Washington insisted that agriculture also be included in the discussions. Talks on more minor regulatory issues have made better progress.

Mr Hogan will also meet members of Congress during the three-day trip, which ends on Thursday.


Leave a Reply