Don't make him angry

EU plans to appease Trump on trade

main 84937142 Reuters – Donald Trump US president Jean-Claude Juncker European Commission EU trade conflict auto car tariffs
I'd do anything for you, Donald. Source: Reuters

European negotiators hope to make peace in the current trade dispute with the United States by side-stepping the hard battles. EU Trade Commissioner Cecilia Malmström plans to stay away from sensitive issues like autos or agriculture and focus on more humdrum problems such as US beef exports and European technical standards.

She plans to put the plan into action when she meets US Trade Representative Robert Lighthizer next week, according to EU sources. Officials hope this will avoid inciting Donald Trump, the volatile US president, into taking precipitous action like the 25-percent tariff on autos he threatened a few months ago.

Brussels is following the strategy laid down by EU Commission President Jean-Claude Juncker, who negotiated a trade ceasefire in Washington in July. He and Mr. Trump deliberately excluded the auto sector to talk about industry tariffs more generally. Their joint declaration also omitted any mention of agriculture.

EU officials expect Mr. Lighthizer to push Europe to open up its protected agricultural market to US exports, but they hope by not including the auto industry they will give him less leverage on that issue.

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EU Trade Commissioner Cecilia Malmström: Seeking trade peace for our time. Source: Reuters

Brussels this week indicated it would allow more hormone-free meat imports from the US and would end its years-long dispute over US beef exports at the World Trade Organization. The Brussels negotiators also hope for a quick accord on mutual recognition of technical standards in food processing. On the other hand, they won’t even bring up the tricky issue of regulation.

Ms. Malmström will also touch on the punitive US tariffs on steel and aluminum, which the EU considers illegal, suggesting further talks are to come.

German industry is likely to chafe under the appeasement strategy. Business groups have urged Brussels to seek a comprehensive agreement with the US that reflects the goals of the now abandoned Transatlantic Trade and Investment Partnership (TTIP). They even want to ramp up demands, with a position paper urging the US to open up its public procurement to foreign providers – a sensitive topic even before the new administration took over.

Berlin quickly told the business groups to tone it down, industry sources say, urging restraint and pragmatism in the delicate relations. The last thing the German government wants is to send the wrong signal to the combative Mr. Trump.

Dana Heide and Donata Riedel cover economic policy for Handelsblatt in Berlin. Till Hoppe is a correspondent in Brussels. Darrell Delamaide, a Handelsblatt Global editor in Washington, DC, adapted this article into English. To contact the authors: heide@handelsblatt.com, hoppe@handelsblatt.com, and riedel@handelsblatt.com.

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