EU says ready to continue retaliation in US trade dispute

LONDON: The European Union says it will continue a tit-for-tat escalation in its trade dispute with the United States while countering President Donald Trump’s assertion that the US is being treated unfairly by the 28nation bloc.

Jyrki Katainen, the EU commissioner in charge of jobs and growth, told the French newspaper Le Monde that if Trump applied new tariffs to European cars, as he threatened last week, the bloc “again, would have no choice but to react”.

The EU imposed tariffs on €2.8 billion (RM13.23 billion) of American products last week in response to duties on its metals exports deemed to be a threat to US national security.

The commission, the bloc’s executive arm, said the €1 trillion in commerce between the EU and US was equitable, and it disputed Trump’s assertion that the EU needed to be punished because of unfair trade practices, according to an internal EU memo obtained by Bloomberg.

The US had a surplus in services trade with the EU of US$45 billion last year, according to the memo, citing US statistics.

The memo also said the EU was the largest investor in the US, accounting for 72 per cent of inward foreign direct investment and that EU-headquartered firms employed 3.2 million people in the US.

Including trade in goods, services and primary income from investments, the US runs a €12 billion surplus with the EU, according to the memo.

“Based on the Tariffs and Trade Barriers long placed on the US and its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20 per cent Tariff on all of their cars coming into the US. Build them here!” said Trump in the tweet.

The European tariffs target politically resonant products, including 25 percent duties on Harley-Davidson Inc motorcycles, Levi Strauss & Co jeans and bourbon.

The countermeasures, which went into effect on Friday, hit US consumer, agricultural and steel products in many key Republican constituencies, putting pressure on Trump ahead of crucial midterm elections in November.

“Members of the US Congress, from both parties, don’t necessarily share the views of the president, nor does the private sector,” Katainen told Le Monde. “Once the measures start making an impact, the pressure will mount.”