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Mr. Juncker goes to Washington for tough trade talks

July 25, 2018

European Commission President Jean-Claude Juncker says he is "cheerful and relaxed" ahead of a visit with Donald Trump to prevent a trade war with the US. He has arguments, but no offers. DW's Bernd Riegert reports.

Jean-Claude Juncker and Donald Trump
Image: Getty Images/AFP/M. Schreiber

European Commission President Jean-Claude Juncker is not shy when it comes to being friendly to people he needs to negotiate with. In Brussels, he is known for hugging, kissing and cuddling almost everyone if it serves the cause, namely a relaxed mood. It remains to be seen how US President Donald Trump will react to the Commission president's body language during one-on-one talks in the Oval Office on Wednesday.

At the G7 summit in Canada in June, Trump, referring to trade, called Juncker a "real killer." At the time, the Luxembourgish politician was not quite sure whether this was meant as a compliment. For the experienced negotiator, however, there's no doubt: "I'm heading over, cheerful and relaxed."

WTO at a deadlock?

Competitor, opponent, enemy

Trump has imposed punitive duties on steel and aluminum imports from the EU. The bloc responded with retaliatory duties on US goods. Both sides have filed complaints against each other with the World Trade Organization (WTO). Trump has been threatening customs duties on European cars for months, a move that could hit the German automotive industry particularly hard.

Ten days ago, the mercurial president declared the EU a competitor, an opponent, even an enemy. "The European Union is a foe. What they do to us in trade. Now you wouldn't think of the European Union, but they're a foe," Trump said in an interview with CBS.

Read more: In the era of Trump, can the concept of 'free trade' survive?

Whiskey bottles
The EU's reciprocal tariffs were targeted at quintessentially American goods — including bourbon whiskey, peanut butter, corn, cranberries, blue jeans, and Harley-DavidsonsImage: picture-alliance/dpa/C. Charisius

Trade offer from Brussels?

The president's chief economic policy advisor expects Europeans to make an offer for tariff-free trade. "Jean-Claude Juncker is coming to Washington next week, possibly with a significant trade offer," Larry Kudlow told CNBC last week. A few days later, the EU Commission announced that no offers were being put on the table in Washington.

Kudlow also said Chancellor Angela Merkel is behind the EU's alleged offer, a statement that has little to do with the reality of EU trade policy. Juncker rejects all attempts at bilateral deals between EU states and Donald Trump. "The EU Commission alone is responsible for formulating the European Union's trade policy," he says, adding that all attempts to divide Europeans are in vain.

Juncker presents facts

The fact that EU trade policy is pursued by all 28 EU states together does not seem to make sense to Trump.

"The EU is very difficult. I have to tell you. Perhaps the most difficult thing ever," Trump complained in the interview with CBS.

So once again, Juncker plans to show the US president the EU's positions and the advantages of trade across the Atlantic that is as free as possible.

Juncker argues he made his approach clear at the G7 meeting in Canada, where he repeated the EU arguments to Trump. "And I'll do it again and again. It's not about 'fake news,' it's about objective facts."

Read more: German politicians allied against Steve Bannon

EU seeks 'de-escalation'

If the tariff dispute were to include cars that would be a "disaster," says EU Trade Commissioner Cecilia Malmstrom, who is accompanying Juncker to Washington. She says it is important to make Trump understand that production chains are so interwoven that jobs in the US, too, are at risk from new customs duties. "We want to diffuse the situation as soon as possible, to de-escalate this before it blows up in our faces, doing harm to the trans-Atlantic relationship, our economies and the global order," said Malmstrom in Brussels before departing for Washington.

So far, these well-known arguments have not impressed Trump. Instead, he likes to mix trade policy with security and defense policy. Trump told CBS that when it comes to trade, the EU has "really taken advantage of us. Many of these countries are in NATO and they weren't paying their bills."

Linking trade issues and the military alliance is wrong, says Malmstrom, who argues that trade is between companies and people, not between states. The citizens, she says, would end up paying the price for the quarrel.

Is TTIP light a solution?

In his meeting with Trump, Juncker will likely make an effort to act self-confident; the EU is after all the largest US trading partner and the most important export market for US companies.

The EU has just signed a free trade agreement with Japan, and is currently ratifying a similar accord with Canada. Negotiations are underway with Latin America and China.

At the G20 meeting in Argentina, US Treasury Secretary Steven Mnuchin again brought up a completely tariff-free trade in goods between the US and the EU.

Could that be a solution?

Tariff-free trade would have been part of the comprehensive TTIP agreement between the EU and the US, on hold since Trump took office. Negotiations on TTIP could be resumed. Let's call it "Trump-TIP" or "Tremendous Trump-TIP" if that serves the cause, Daniel Caspary, a member of the European Parliament and trade expert, suggested in June. Trump could probably sell that as his great success.

EU Trade Commissioner Malmstrom won't attempt to predict what will emerge from the talks in Washington on Wednesday between the "difficult" EU and the self-proclaimed "dealmaker."

She is convinced of the importance of getting together and discussing the issues. "It's an effort which we should try to do, but we'll see. Maybe there will be no outcome at all, and then we will have to discuss what to do."

Olive farmers in Trump's firing line

Bernd Riegert
Bernd Riegert Senior European correspondent in Brussels with a focus on people and politics in the European Union