Trump, Juncker voice desire to reduce tariffs, trade tensions

[WASHINGTON] US President Donald Trump and the European Union's chief executive, Jean-Claude Juncker, both expressed a desire on Wednesday to cut tariffs and ease trade transatlantic trade tensions as a high-stakes White House meeting got underway.

Mr Trump, speaking to reporters with Mr Juncker seated next to him in the Oval Office, said "hopefully we can work something out" on fairer trade with Europe.

"If we could have no tariffs and no barriers and no subsidies, the United States would be extremely pleased," Mr Trump said.

"We have many countries where they have massive barriers and they have massive tariffs, and we have to follow. You could call it retaliation. But I'd rather just say that we want reciprocal. So whether it's with European Union or others, it has to be reciprocal in nature at a minimum," Mr Trump added.

Mr Juncker, the European Commission's president, said of the EU and United States, which represent half the world's trade: "We are close partners, allies - not enemies. We have to work together."

"I think that we have to talk each to another, not at another," Mr Juncker added.

Trade experts expressed hope that the Trump-Juncker meeting could help stave off Mr Trump's plans for a 25 percent US tariff on imported cars and automotive parts and start a process for US allies to begin reducing automotive tariffs.

"I think that we should focus on reducing tariffs instead of increasing tariffs. That's what we have to do," Mr Juncker added.

The European Commission's trade commissioner, Cecilia Malmstrom, said she was drawing up a US$20 billion list of US goods to hit with retaliatory duties should Washington impose tariffs on imported cares.

"We hope that it doesn't come to that and that we can find a solution. If not, the EU Commission is preparing a rather long list of many American goods," Ms Malmstrom told Swedish newspaper Dagens Nyheter on Wednesday.

"I think President Juncker believes he is here to try to calm the situation and get into a negotiating process to stave off potential U.S. tariffs on autos. I suspect they would have no idea how this meeting will go or not go," said Heather Conley, senior vice-president of European affairs at the Center for Strategic and International Studies (CSIS), a Washington foreign policy think tank.

The meeting has the potential for tension.

Mr Juncker has called Mr Trump's trade ideas "stupid", while Mr Trump has declared on Twitter that "tariffs are the greatest" because they have pushed trading partners to negotiate with the United States.

After a one-on-one meeting with Mr Trump, Mr Juncker is scheduled to participate in a larger meeting with Trump Cabinet officials, and later in the day will speak at an event hosted by CSIS.

AUTO TARIFFS

Automakers and White House officials privately believe Mr Trump is intent on imposing tariffs of up to 25 per cent on imported cars and parts despite the almost unanimous opposition of the auto industry and deep concern among members of Congress.

The Trump administration in May launched an investigation into whether imported vehicles and parts pose a national security threat. Mr Trump has said he would quickly impose tariffs of 20 or 25 per cent.

Several auto industry officials have said they believe this national security probe into automotive imports is designed to persuade Mexico, Canada, Japan, the EU and others to make concessions on trade.

The Commerce Department could recommend new tariffs as early as September, administration officials have said.

Major US and global automakers told the Commerce Department last week that imposing tariffs of 25 per cent on imported cars and parts would raise the price of US vehicles by US$83 billion annually and cost hundreds of thousands of jobs.

The Commerce Department said on Wednesday it had made no decisions and aims to complete the investigation "within a couple months."

In response to the US metals tariffs, the EU has already imposed its own import duties on 2.8 billion euros (S$4.48 billion) worth of US goods, including products like bourbon and motorcycles that are made in some of the electoral districts that supported Mr Trump in the 2016 US election.

The Commission briefed EU countries last week on the bloc's possible response to car tariffs, saying in theory it could hit 9 billion euros of US goods, according to EU sources.

However, some EU diplomats said the commission was also looking at going for double that amount - to the level Ms Malmstrom is suggesting - at half the duty rate.

The European Commission, which handles trade policy on behalf of the EU's 28 member countries, has insisted that Mr Juncker is seeking to open a dialogue with Mr Trump, rather than to negotiate. EU officials have also downplayed the idea that Mr Juncker is arriving with a novel trade offer.

REUTERS