EU fears offer to US not enough to end trade row

Europe was hit by the shock tariffs in March, part of the protectionist president’s threat of an “America First” trade war with Washington’s closest partners, including Canada, Mexico and Japan.

“If we are exempted, then we are willing to engage in talks and see how we can facilitate trade relations,” said Malmstrom.

She has spearheaded a series of talks with US Commerce Secretary Wilbur Ross, a stalwart of Trump’s hardball tactics who also plays a role in the parallel negotiations with China.

But asked if she thought the EU’s gesture to the US was acceptable to Washington, Malmstrom answered: “I think they don’t think it’s enough.”

– ‘Allies, not vassals’ –

The ministers will take encouragement from the US-China development on Sunday with Washington and Beijing backing off from tit-for-tat tariffs after reaching an as-yet unspecified accord on slashing the massive American trade deficit with China.

The European Union has said it refuses all trade talks with the United States unless Washington grants a permanent exemption from the painful steel and aluminium tariffs that are set to kick in on June 1.

“We are allies but we are not vassals. Today is a moment of truth for the EU,” said French trade minister Jean-Baptiste Lemoyne as he arrived for the talks.

EU trade ministers will discuss a plan laid out by EU leaders at a summit last week for a limited EU-US trade deal as well as opening up the European market to US natural gas — if the exemption is granted.

Europe’s incentives come with a threat to retaliate against the US with European tariffs on American imports, including iconic items such as Harley-Davidson motorbikes and bourbon whiskey.

These counter-measures will officially become enforceable on June 20, but Europeans have committed to not use them as long as talks with the US are ongoing.

Trump announced the duties of 25 percent on imported steel and 10 percent on aluminium in March, but has twice accepted to suspend their effect as talks with key allies continued.

– ‘Limited’ deal –

Any attempt to negotiate a trade deal, no matter how small, requires a mandate from member states, which the ministers are expected to discuss over lunch on Tuesday.

The “limited” deal would focus in particular on cars, a strategic sector that Trump has brought sharp attention to in several tweets that specifically targeted Germany — an auto powerhouse on its own.

Export powerhouse Germany is very much in favour of getting a deal while France is more reticent in the face of the US pressure tactics.

Whatever the case, EU leaders insist that there is no chance of relaunching the very unpopular TTIP talks, the major EU-US trade agreement torpedoed by Trump when he entered office last year.

At the request of the United States, Europeans are also ready to “deepen relations” in energy matters, in particular in the field of liquefied natural gas.

As a result of the shale gas boom, the US is avidly seeking new export markets and wants to compete with Russia and Norway, the EU’s current main gas suppliers.

Europe has also raised the possibility of backing a drive to reform the World Trade Organization, the international trade watchdog that Trump accuses of being soft on China and harmful to US interests.