Europe considering quick US trade pact

The European Union vowed to seek a quick and limited trade accord with the U.S. in the hope of keeping at bay the threat of American tariffs on EU cars and auto parts.

The pledge at a gathering of commerce ministers from the EU in Innsbruck, Austria, on Friday showed that Europe is still trying to understand the trade-policy intentions of U.S. President Donald Trump’s administration and wary of being wrong-footed.

At stake is how to carry forward a deal in July between Trump and European Commission President Jean-Claude Juncker that put on hold possible U.S. automotive duties based on the same nationalsecurity grounds the White House used to impose controversial levies on foreign steel and aluminum.

The two leaders agreed on July 25 in Washington to work toward the elimination of tariffs on industrial goods traded between the EU and U.S., setting up a working group that had its political kickoff in September. Both sides also held out the prospect of an eventual settlement to the dispute over the U.S. metal levies, which prompted the bloc to retaliate with tit-fortat duties on American goods.

“After the meeting of Trump and Juncker, there are clear signals of wanting to work together,” Economy Minister Margarete Schramboeck of Austria, current holder of the EU’s rotating presidency, told reporters on Friday in Innsbruck. “We in Europe need to stand united and strong.”

The current ceasefire in the trans-Atlantic trade battle risks coming to an abrupt end and sparking the kinds of escalating attacks featured in the U.S.-China fight, should Trump revive the threat of auto duties against Europe. The value of EU automotive exports to the U.S. is about 10 times greater than that of the bloc’s steel and aluminum exports combined, meaning European retaliatory levies would target a bigger amount of American exports to Europe.