Trade Tensions Poised to Rise as EU-U.S. Talks Break Down

06/09/2020

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Jonathan Sterns | Bloomberg

European Union efforts to soothe transatlantic trade tensions have stalled, according to the bloc’s trade chief, who said the upcoming U.S. election means any breakthrough may be delayed until after November.

Washington has “stepped back” in recent weeks from settlement talks aimed at defusing a dispute over aircraft subsidies, Phil Hogan told a meeting of trade ministers in Brussels on Tuesday. Failure to reach an accord means the bloc would impose billions of dollars of tariffs on U.S. exports as soon as July.

“We must acknowledge that the U.S. is now in a pre-election phase,” Hogan said. “Political attention in Washington is therefore much more on the immediate challenges in U.S. domestic politics, such as the need to deal with the Covid outbreak.”

The EU wants to renew a July 2018 truce that began to fray late last year when the U.S. targeted Europe with new tariffs or warnings of them. Chief among Europe’s worries is a lingering U.S. threat to hit EU cars and auto parts with duties based on national-security grounds.

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