EU concerned about US-China trade spat

Fears ‘collateral damage’

SHANGHAI, May 16, (RTRS): Europe is concerned about collateral damage it may suffer from America’s escalating trade spat with China, an EU official said as he criticised Washington for breaking a years-long push to force Beijing to cut steel and aluminium exports.

The comments come after Washington imposed hefty tariffs on steel and aluminium imports in March amid a worldwide glut of both metals that is largely blamed on excess production in China.

The administration has since granted temporary exemptions to some countries as well as the European Union, but the bloc has demanded a permanent reprieve.

Concerns are also growing that the European market will be flooded with foreign steel as major producers divert metal that was destined for the United States

Speaking on the sidelines of a food trade show, Phil Hogan, the European Union agriculture commissioner, urged Washington to continue to work with the bloc to deal with prolonged trade issues with China.

For years, both regions have accused Chinese producers of dumping unwanted metal abroad, hurting international companies and adding to oversupply.

“I think the (US) tactics (...) could unnecessarily escalate the trade dispute on steel and aluminium into other areas, which is a source of concern for the European Union,” Hogan told Reuters.

Concerns

Hogan outlined his concerns in a meeting with US Undersecretary for Agriculture Ted McKinney this week in Shanghai, he told a media briefing, as the world’s top two economies were set to hold a second round of high-level trade talks.

US President Donald Trump’s top trade and economic officials are preparing to meet Chinese Vice-Premier Liu He in Washington to discuss concerns ranging from intellectual property protection to farm goods and steel capacity.

“We know that there’s overcapacity and we do have concerns about the Chinese dumping of these particular products, but there’s a way of dealing with these issues,” he told Reuters.

In meetings with senior Chinese government officials this week, Hogan also urged Beijing to continue to give access to the EU region’s beef, following its approval of Irish imports, and sought clarification on the nation’s proposed food safety certificates.

European and US governments have worried that proposed rules requiring health certificates for all food imports, even if the products are deemed low-risk, would hamper billions of dollars of trade with the world’s second-largest economy.

The rules were due to take effect in October last year, but Beijing agreed to a two-year postponement to allow companies more time to comply.

Among the Chinese officials Hogan met were Han Changfu, the minister for agriculture and rural affairs, and vice premier Hu Chunhua.

Hogan, whose official title is European commissioner for agriculture and rural development, is leading a delegation of European food companies in China this week as part of the trade show.

Powerhouse

The United States is seeking a trade deal with China, White House economic adviser Larry Kudlow said on Tuesday as talks between the world’s two economic powerhouses resume in Washington this week.

Kudlow, speaking in a live interview with Politico news outlet, said he backed US Treasury Secretary Steven Mnuchin’s efforts to reach an agreement with Beijing and that both countries must take action.

“He is looking for a deal, I support him on that, wholeheartedly, assuming it’s a good deal. He has my support,” Kudlow said, adding that no agreement had been reached yet.

“Both sides should try to lower tariffs as much as possible ... and to take down non-tariff barriers wherever they are,” he told Politico. “Free and open trade, I think that’s the solution. I think that’s where we are as a group.”

His comments come as Trump’s top trade and economic officials prepare to meet with Chinese Liu He to discuss concerns ranging from intellectual property protections to farm goods to steel capacity.

Trump has long-promised to crack down on China and raised concerns about an all-out trade war after threatening to impose tariffs on up to $150 billion worth of imports from China, prompting Beijing to retaliate.

But he offered an olive branch in calling on US officials to revisit penalties for Chinese company ZTE Corp for flouting US sanctions on trade with Iran and North Korea.

“Trade negotiations are continuing with China. They have been making hundreds of billions of dollars a year from the US, for many years. Stay tuned!” Trump tweeted on Tuesday.