As European Union leaders try to coax President Trump to consider the reopening of talks over the Transatlantic Trade and Investment Partnership – a work-in-progress trade agreement that was abandoned shortly after Trump took office – the US has delivered a spate of demands on topics ranging from trade to national security, as a newly emboldened President Trump pushes his agenda with little room for compromise.
According to Bloomberg, which cited a report in German-language magazine Der Spiegel, the Trump administration demanded that European countries demonstrably boost defense spending. Other demands included capping EU steel exports to the US at the 2017 level, as well as demanding that the EU take action to combat Chinese dumping.
Jens Weidmann
The EU and US are in negotiations over potentially exempting the EU from some or all of the steel and aluminum tariffs imposed by Trump earlier this month.
Meanwhile, in an interview with Neue Osnabrücker Zeitung, a regional German newspaper, Bundesbank chief Jens Weidmann cautioned against any “reflexive or emotional” retaliation to US tariffs, emphasizing that the policy would harm US consumers on its own.”
“In any case, we should not respond reflexively or emotionally, because that threatens to further escalate the situation,” said Weidmann. Already it is clear that especially the US consumers are likely to suffer from the threatened tariffs. “Incidentally, even in the United States, the current trade policy of the government is indeed critically questioned,” said Weidmann.
Instead, he said the EU should sue the US before the World Trade Organization, the transnational body set up to resolve trade disputes.
If a negotiated solution fails “and there are doubts that measures are not compatible with WTO rules, the WTO offers procedures to resolve such issues,” Weidmann said. “You should also use that to not just accept a breach of the rules and create a precedent.”
Weidmann claimed that neither party is interested in a trade war…
“Nobody is interested in a trade war; in the end, everyone loses,” continued Weidmann. “Let us take the US at our word and put us together with the aim of reducing existing tariffs comprehensively,” he called for negotiations. Weidmann was speaking on his way to a G-20 summit in Buenos Aires, where he said he expected the ground to be laid for such talks. Work on the TTIP agreement can also be pushed forward again.
“The EU should make it clear: Anyone who is interested in free and fair trade has a partner in us with whom he can make a difference,” said Weidmann.
He added that the prospects for an “agreement in principle” with the US are good.
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