The deal concluded between European Commission President Jean-Claude Juncker and US President Donald Trump when they met in Washington on Wednesday 25 July has raised both hope and questions in the European capitals. The deal is on a plan to defuse the latent trade dispute between the European Union and the United States and is notably based on the negotiation of a possible agreement on total tariff liberalisation for industrial products (except cars) and on the Europeans' promise to import soybeans and liquefied natural gas (LNG) (see EUROPE 12071).
Germany, whose record trade surpluses and automobile industry competitiveness are the prime target of Trump's protectionist attacks on Europe, has hailed the agreement reached by Juncker.
"Not only is the threat of customs duties on automobiles pushed back, but we also agreed to work together against unfair trade practices and for a reform of the World Trade Organisation (WTO)" , Germany's Foreign Affairs Minister Heiko Maas stated. "This release could avoid a trade war and save millions of jobs! That is good news for the global economy", his colleague in charge of the economy, Peter Altmaier, said.
"It is crucial to prevent a trade war with the US. A close partnership between the EU and the US is important for economic growth and stability in the world. It is good that Mr Juncker is working with Mr Trump to strengthen the partnership between the US and EU, and to promote free and fair trade. In Austria, exports guarantee one in two jobs – that's why I support Mr Juncker in this domain", Austria's Chancellor and current rotating president of the EU Council Sebastian Kurtz stated.
"It is very important that the EU and US cooperate on trade and do not oppose each other", Dutch Prime Minister Mark Rutte said.
Not a new TTIP. France, which feared Trump would also take agricultural products into account in addition to tariffs on cars, came across as more circumspect.
"France and the EU never wanted a trade war with the US. The agreement yesterday between Trump and Juncker is useful, but we must be careful to preserve our European interests", France's President Emmanuel Macron tweeted on Thursday.
"I am not in favour of our launching into the negotiation of a huge trade agreement, like with TTIP, because the context does not allow it", Macron then warned, from Madrid, reaffirming his opposition to include agriculture, thus echoing the words of his economy minister, Bruno Le Maire.
"I consider that no European environmental, health or food standard should be removed or lowered. Clear gestures are needed from the US too – signals of de-escalation on the steel and aluminium to which illegal taxes have been applied. For me, this is a precondition before any concrete step forwards", Macron said.
Le Maire meanwhile insisted that access to US public procurement be part of the discussions, saying that US public procurement is "largely closed" to European companies.
Spain's Prime Minister Pedro Sanchez, who was hosting Macron on Thursday, said he did "not believe that an economy could impose its criteria and policies in connection with international trade". "We do not want a trade war", Sanchez added, showing his determination "to defend the (EU) common agricultural policy".
At the European Parliament, Manfred Weber (Germany), the leader of the EPP group, to which Juncker is affiliated, hailed the agreement. "Europe is strong when we stand together. We fight for free and fair trade, because everyone benefits from it. This will secure jobs and growth both in the EU and in the US. Good news from DC", he tweeted.
"We are relieved that further escalation of the trade conflict was avoided and duties on European cars do not seem to be an issue any more at this point. However, as long as the US has not lifted the illegal tariffs on aluminium and steel, the situation remains critical", S&D group leader Udo Bullmann (Germany) stated.
"The fact that the EU acted united and with harsh counter-measures towards the illegal tariffs imposed by the US has put Trump under pressure", Bullmann added.
EU position weakened, according to Bernd Lange. The chair of the European Parliament's international trade committee, Bernd Lange (S&D, Germany), said that the EU's negotiating position in the face of Trump is now "weakened". "Trump has withdrawn neither his customs tariffs on steel and aluminium, nor his threat on the import of cars", he said, deeming there was a risk of trade war in the discussions to come.
"Let's not be naive. We must keep a direct line with Trump and get rid of the taxes on steel and aluminium", the leader of the ALDE Group, Guy Verhofstadt (Belgium), said.
"To satisfy Mr Trump's delirium, Mr Juncker is committing on behalf of the EU, without a mandate, but with the support of France, to import more GM soybeans and shale gas", Yannick Jadot (Greens/EFA, France) stated.
Doubts about taxes on cars. Over in the US, Trump cried victory on Thursday to US farmers in Iowa. "We have just opened up Europe for you, farmers", he said.
US Treasury Secretary Steven Mnuchin stated the objective was to conclude an agreement on trade but that the priority was to find a way out on the customs taxes on steel and aluminium. He also confirmed that there would not be any customs taxes on imports of European cars during the negotiations.
On Thursday, US Commerce Secretary Wilbur Ross said that Trump had asked the US Department of Commerce to continue its investigation, under Section 232 of the 1962 US Trade Expansion Act, into the imports of European vehicles (including lorries and spare parts) to determine the impact of these imports on US national security (see EUROPE 12026).
Ross nevertheless also said that Trump had ordered that no measure be taken during these negotiations, and he announced the publication of the results of the investigation in August.
In the opinion of White House economic adviser Larry Kudlow, Trump has obtained more than he hoped from the agreement with Juncker. Kudlow gave assurances that Juncker had committed to help the US to force China to change its trade practices. (Original version in French by Emmanuel Hagry)