President Trump has set the cat among the pigeons by imposing on his European allies import tariffs of 25 percent on steel and 10 percent on aluminum, causing the European Union to retaliate with similar amounts of tariffs on Harley-Davidson Inc motorcycles, Kentucky bourbon, and other products.
Trump, who frequently criticizes Europe’s 10 percent car tariffs, is also studying adding a 25 percent levy on automotive imports, which would hit both Europe and Japan hard.
The President, in a recent interview, had referred to the European Union as a foe.
“I think 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,” he said.
At a meeting in Argentina, finance ministers and central bankers from some of the world’s largest economies have called for greater dialogue to reduce trade tensions.
The representatives from the various countries posited the view that the heightened trade and geopolitical tensions is unproductive and one that could lead to the derailing of global growth.
In a draft document, reviewed by Reuters, it reported that the document notes that the global economy was growing, and unemployment was at a decade low, but it also warned that growth was becoming less synchronized among major economies and downside risks over the short- and medium-term had increased.
These include according to the draft document,” rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies.”
The ministers reaffirmed the conclusions from G20 leaders at their most recent summit in Hamburg in July last year, when they emphasized that trade was an engine of global growth and that multilateral trade agreements are important.
“We…recognize the need to step up dialogue and actions to mitigate risks and enhance confidence,” the draft said. “We are working to strengthen the contribution of trade to our economies.”
In the meantime, the U.S. Treasury Secretary Steve Mnuchin has sought to use the meeting to woo Europe and Japan with the offer of free-trade deals, as Washington tries to gain leverage with allies in its dispute with China.
However, French Finance Minister Bruno Le Maire rebuffed the overture on Saturday, saying that Washington must drop its tariffs before any talks could start.
Carol Maye, Readers Bureau, Fellow
Edited by Jesus Chan
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