Tag: Transatlantic relations

  • Europe’s eastern half claps back at Macron: We need the US

    Europe’s eastern half claps back at Macron: We need the US

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    Stop driving Europe away from the United States, dismayed central and eastern European officials fumed on Tuesday as French President Emmanuel Macron’s comments continued to ripple across the Continent.

    Macron jolted allies in the EU’s eastern half after a visit to China last week when he cautioned the Continent against getting pulled into a U.S.-China dispute over Taiwan, the self-ruled island Beijing claims as its own, imploring his neighbors to avoid becoming Washington and Beijing’s “vassals.”

    The comments rattled those near the EU’s eastern edge, who have historically favored closer ties with the Americans — especially on defense — and pushed for a hasher approach to Beijing.

    “Instead of building strategic autonomy from the United States, I propose a strategic partnership with the United States,” Polish Prime Minister Mateusz Morawiecki said Tuesday before flying off to the U.S., of all places, for a three-day visit.

    Privately, diplomats were even franker.

    “We cannot understand [Macron’s] position on transatlantic relations during these very challenging times,” said one diplomat from an Eastern European country, who, like others, spoke on the condition of anonymity to freely express themselves. “We, as the EU, should be united. Unfortunately, this visit and French remarks following it are not helpful.”

    The reactions reflect the long-simmering divisions within Europe over how to best defend itself. Macron has long argued for Europe to become more autonomous economically and militarily — a push many in Central and Eastern Europe fear could alienate a valuable U.S. helping keep Russia at bay, even if they support boosting the EU’s ability to act independently. 

    “In the current world of geopolitical shifts, and especially in the face of Russia’s war against Ukraine, it is obvious that democracies have to work closer together than ever before,” said another senior diplomat from Eastern Europe. “We should be all reminded of the wisdom of the first U.S ambassador to France Benjamin Franklin who rightly remarked that either we stick together or we will be hanged separately.” 

    Macron, a third senior diplomat from the same region huffed, was freelancing yet again: “It is not the first time that Macron has expressed views that are his own and do not represent the EU’s position.”

    Walking into controversy

    In his interview, Macron touched on a tense subject within Europe: how it should balance itself against the superpower fight between the U.S. and China.

    The French president encouraged Europe to chart its own course, cautioning that Europe faces a “great risk” if it “gets caught up in crises that are not ours, which prevents it from building its strategic autonomy.”

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    Macron said he wants Europe to become a “third pole” to counterbalance China and the U.S. in the long term | Pool photo by Jacques Witt/AFP via Getty Images

    It’s a stance that has many adherents within Europe — and has even worked its way into official EU policy as officials work to slowly ensure the Continent’s supply lines aren’t fully yoked to China and others on everything from weapons to electric vehicles. 

    Macron said he wants Europe to become a “third pole” to counterbalance China and the U.S. in the long term. An imminent conflict between Being and Washington, he argued, would put that goal at risk. 

    Yet out east, officials lamented that the French leader was simply treating the U.S. and China as if they were essentially the same in a global power play.

    The comments, the second diplomat said, were “both ill-timed and inappropriate to put both the United States and China on a par and suggest that the EU should keep strategic distance to both of them.”

    A Central European diplomat flatly dismissed Macron’s stance as “pretty outrageous,” while another official from the same region chalked it up to an attempt “to distract from other problems and show that France is bigger than what it is” — a reference to the protests roiling France amid Macron’s pension reforms.

    The frustration in Central and Eastern Europe stems in part from a feeling that the French president has never made clear who would replace Washington in Europe — especially if Russia expands its war beyond Ukraine, said Kristi Raik, head of the foreign policy program at the International Centre for Defence and Security, a think tank in Estonia, a country of about 1.3 million people that borders Russia.

    It’s an emotional point for Europe’s eastern half, where memories of the Soviet era linger. 

    “We hear Macron talking about European strategic autonomy, and somehow just being completely silent about the issue, which has become so clear in Ukraine, that actually European security and defense depends very strongly on the U.S.,” Raik said. 

    Raik noted, of course, that European countries, most notably Germany, are scrambling to update their militaries. France has also pledged large increases in its defense budgets. 

    But these changes, she cautioned, will take a “very long time.”

    If Macron “wants to be serious in showing that he really aims at a Europe that is capable of defending itself,” Raik argued, “he also should be showing that France is willing to do much more to defend Europe vis-à-vis Russia.” 



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    ( With inputs from : www.politico.eu )

  • Trump’s tariff time bomb threatens to blow up transatlantic trade

    Trump’s tariff time bomb threatens to blow up transatlantic trade

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    BRUSSELS — The next big transatlantic trade fight is primed to explode.

    Negotiators from Brussels and Washington are scrambling to solve a five-year dispute over steel and aluminum dating back to former U.S. President Donald Trump’s decision to slap tariffs on European imports. They have until October to get a deal but are still so far apart that European officials now fear the chances of an agreement are slim. 

    Without a deal, both sides could reimpose billions of dollars worth of trade tariffs on each other’s goods — potentially spreading well beyond steel to hit products including French wines, U.S. rum, vodka and denim jeans.

    While U.S. negotiators are still hopeful that an agreement can be reached in time, the political fallout of failure for President Joe Biden would be serious, with U.S. exports facing a hit just ahead of his potential re-election battle in 2024. More broadly, another breakdown in trade relations between Europe and the United States would heap further pressure on a relationship that is already under strain from Biden’s green subsidies package for American industries.  

    With a more assertive China threatening to disrupt supply lines, and Russia’s war in Ukraine straining global commerce, the last thing world trade needs is a new crisis between major Western allies. Six EU officials briefed on the talks worry that’s exactly what will happen. 

    “The start positions are just too far away,” said one of the officials, who asked to remain anonymous to discuss sensitive matters. “The huge concessions that would have to be made are politically not realistic in that timeframe.”

    The transatlantic disagreement is a hangover from the days of Trump, who imposed tariffs on €6.4 billion worth of European steel and exports in 2018. The tariffs were extra sensitive because Trump had imposed them on grounds of national security. 

    After he came to power, Biden agreed to a temporary cessation of hostilities rather than a complete end to the dispute. His aim was for negotiators to work jointly on making steel production greener and fighting global overcapacity. The unofficial U.S. goal is also to squeeze Beijing’s dumping of Chinese steel, which is made with far more coal-fired power. 

    But unless a new deal is struck by October, the risk is that tariffs return. A summit between Biden and EU leaders has now been penciled in for October, potentially to coincide with the final leg of talks on the dispute.

    China hawks

    Officials in Brussels see the ongoing negotiations as just another push from the U.S. to force them into taking a harder line against China. “The language just seems written to tackle one country specifically,” said one of the European officials.

    Discussions only recently picked up pace through the exchange of a U.S. concept paper and then an EU response. Those texts showed how far apart the two sides are on key issues, the officials said.

    Washington wants to impose tariffs on imported steel or aluminum products, which would increase progressively based on how carbon-intensive the manufacturing process is, according to the proposal seen by POLITICO. Countries that join the agreement, which would be open to nations outside the EU, would face lower tariffs, or none at all, compared to those that do not. 

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    Former U.S. President Donald Trump at a rally at Waco airport | Brandon Bell/Getty Images

    The EU’s response — also seen by POLITICO — does not include any form of tariffs, according to the officials. Brussels fears the American plan for tariffs goes against the rules of the World Trade Organization, which is a no-go for the EU.

    But a senior Biden administration official, who spoke on the condition of anonymity to discuss ongoing negotiations, told POLITICO that tariffs should not be off the table. 

    “That’s a pretty powerful tool for driving the market both to reduce carbon intensity as well as to reset the playing field to counteract non-market practices and excess capacity,” the U.S. official said. “What we’ve been trying to understand and respond to, in part, is what are those reasons that the EU has to have concerns about a tariff-type structure.”

    Karl Tachelet, deputy director general of European steel association Eurofer, said: “We haven’t seen any real ambition or vision to use this as an opportunity to tackle excess capacity or decarbonization. So it can only lead to a clash of views.”

    Americans don’t see it that way.

    “The U.S. and the EU share a commitment to tackling the dual threat of non-market excess capacity and the climate crisis, and the Biden administration is committed to developing a high-ambition framework that accomplishes those objectives for our workers and these critical industries,” said Adam Hodge, spokesperson for the Office of the U.S. Trade Representative.

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    A student does steel work in Dayton, Ohio | Megan Jelinger/AFP via Getty Images

    But the senior Biden administration official argued that the EU proposal lacks ambition. It makes “tweaks around the margin” without actually attacking “the fundamental problem” that the two sides agreed to address when they called their truce. 

    “Our concern with the EU’s paper is that it doesn’t really change the dynamic of trade,” the U.S. official said.

    “If we’re going to change the course of the impact of non-market excess capacity on market economies like the U.S. and EU, as well as really thinking about how can we use trade as a tool to drive decarbonization, we need to produce something that’s different and more ambitious,” the official added.

    Several officials said Washington is also seeking an exemption from the EU’s carbon border tax, which imposes a tax on some imported goods to make sure European businesses are not undercut by cheaper products made in countries with weaker environmental rules.

    Such an exemption for the U.S. is another no-go for Brussels. A European Commission spokesperson said giving the U.S. a pass on the carbon border tax would constitute a breach of WTO rules and “cannot be compared with” the U.S. steel and aluminum measures. 

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    Workers at LB Steel LLC in Illinois manufacture wheel assemblies for high-speed trains | Scott Olson/Getty Images

    Another European concern is that the U.S. wouldn’t scrap the possibility of re-imposing tariffs on the EU, even though the WTO branded them as illegal. Under Trump, Brussels argued only a complete withdrawal of the tariffs would satisfy the EU, contending the duties were an illegal slap in the face of an ally. 

    The senior U.S. official said that using national security to justify the tariffs — a rationale that would surely draw opposition in Brussels — “hasn’t been a part of our conversation with the EU to date.” But the Biden administration’s concept paper wasn’t written with WTO compliance top of mind, the official added. 

    Landing zone

    Brussels and Washington are now negotiating to find a landing zone. 

    “Both sides are coming from two different positions on this,” said one of the European officials, while stressing that “there is a mutual interest to find a solution.”

    Others were more pessimistic. Either way, a Plan B is taking shape in the background. Several of the European officials stressed the EU and the U.S. can also buy more time by prolonging the current ceasefire. “The deadline is always flexible,” said Uri Dadush, a Washington-based fellow at the Bruegel think tank. “Both sides can easily agree to extend.”

    Steven Overly reported from Washington. Sarah Anne Aarup and Camille Gijs contributed reporting from Brussels.



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    ( With inputs from : www.politico.eu )