Juncker travels to Washington on Wednesday to stop the EU-US trade war

President of the European Commission Jean-Claude Juncker hopes to receive an answer at his meeting with US President Donald Trump on Wednesday in Washington regarding whether the European Union can still prevent a full trade war with the United States, but it seems that both sides are currently preparing for escalation.

In June, Trump imposed tariffs on steel and aluminum from the EU, prompting the Union to raise tariffs on goods from the US worth three billion dollars, from peanut butter to whiskey and motorcycles.

However, these measures could be just the beginning of a broader trade war if Trump fulfills his threat to increase tariffs on the automotive industry.

Avoiding and preparing for war

The leadership of the European Union hopes that a full trade war can still be avoided, but at the same time is preparing countermeasures in case Washington further escalates the situation.

“The measures regarding steel and aluminum have turned rhetoric into reality, and if the same were done for cars, the new reality would become truly dark,” said EU Trade Commissioner Cecilia Malmstrom on Thursday, adding that such a move would be “catastrophic.”

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While tariffs on metals affect EU exports worth 6.4 billion euros, the Union’s automotive industry exports are worth more than 50 billion euros annually, the commissioner noted.

Malmstrom will travel to Washington with Juncker for talks with Trump “in the spirit of the long-standing friendship between the US and Europe,” as she stated at an event organized by the German Marshall Fund (GMF).

According to European diplomats, Juncker and Malmstrom are expected to propose a so-called plurilateral sectoral agreement to eliminate tariffs on the automotive sector in order to de-escalate the situation. In addition to the EU and the US, it would include Japan, China, South Korea, and Mexico.

Agreement on tariff elimination

It is said that in addition, Trump will be offered the prospect of an agreement that would lower or even eliminate tariffs on industrial goods.

However, Malmstrom simultaneously warned that the EU is preparing a list of countermeasures if Trump persists with higher tariffs on the automotive industry.

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These could hit American goods such as coal, pharmaceuticals, and chemical products, according to EU sources who confirmed a report by the German magazine Wirtschaftswoche.

Trump’s protectionist approach to trade, which has led him to label the EU as an “enemy” in recent interviews, is one of several reasons why he has antagonized European partners in recent months.

He attacks European countries for not allocating the agreed share of their budgets for defense as per NATO, while at the same time it seems he is trying to get closer to Russian President Vladimir Putin, who has long been a thorn in Europe’s side.

Juncker: I believed that the US and EU were brother and sister

This week, Trump attacked the EU on Twitter regarding the record fine of 4.3 billion euros imposed on Google for violating Union competition rules, and on Friday accused the EU and China of currency manipulation.

Juncker will leave for Washington on Tuesday, and will meet with Trump on Wednesday at 19:30 Central European Time. Later on Wednesday, he will deliver a speech on EU-US relations.

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“After I nurtured the naive belief that the US and Europe were brother and sister, I was very surprised that the President of the United States declared Europe an enemy,” Juncker said this week.

“In every family, it happens that the older brother does not respect the younger siblings,” Juncker added, announcing that he would defend European positions during his visit.