Europe’s New Trade Team to Push Back on ‘Reckless’ Trump

(Bloomberg) --

The European Union’s new leadership team has an old message for U.S. President Donald Trump on trade: cut out the unilateral and protectionist actions.

A week after the U.S. envoy to the EU called for a “reset” in transatlantic ties damaged by Trump’s multiple salvos against the World Trade Organization, European Commission President-elect Ursula von der Leyen vowed to defend the global open-market order underpinned by the WTO when she takes office in November.

“Europe’s place is at the heart of the rules-based multilateral system,” von der Leyen said in a mission letter Tuesday to Phil Hogan, whom she appointed as the EU’s next trade chief.

In an Irish radio interview on the same day, Hogan himself called Trump “reckless” and urged him to see the “error of his ways” in the U.S. trade war with China.

The comments highlight how the EU’s traditional inclination to accommodate its biggest trade partner on commercial questions has been replaced by a growing resolve to confront Washington over them since Trump took office in 2017 with an “America First” agenda.

During his presidency, Trump has outraged Europe by imposing tariffs on European steel and aluminum based on national-security grounds, threatened to do the same on EU automotive goods and brought the WTO’s much-prized arbitration system to the brink of paralysis. The EU has hit U.S. products with duties as retaliation for the metal levies, vowed a similar reaction to any auto tariffs and come up with a makeshift system for settling disputes at the WTO.

While von der Leyen said in her letter to Hogan that he’ll need to work toward a “positive, balanced and mutually beneficial trading partnership with the United States,” she also highlighted the need for the EU to deepen commercial ties with China, Africa, Australia and New Zealand.

And, in a sign of the EU’s increased confidence when it comes to fashioning the global commercial order, von der Leyen said simply and bluntly: “The European Union is the world’s trading superpower.”

Charting the Trade War

China resumed purchases of U.S. pork. In the week ended Sept. 5, exporters sold 10,900 tons of American pork to China, U.S. Department of Agriculture data showed Thursday. That’s the biggest order since late May. 

Today’s Must Reads

• Showing flexibility | The Trump administration is weighing a limited trade deal with China that would delay and even roll back some U.S. tariffs for the first time.
• Shopping list | China is encouraging companies to buy U.S. farm products including soybeans and pork, and it will exclude those goods from additional tariffs.
• Peace makers | The finance chiefs of Australia, Canada, Singapore and Indonesia called for an end to the U.S.-China tariff feud as it upsets markets and hurts growth.
• Deere crossing | Demand for construction equipment in the U.S. is near a peak and may decline in 2020, a Wells Fargo analyst wrote, pushing down Deere and Caterpillar shares.
• No winners | It’s tempting to laugh off the U.S.-China trade dispute as a soap opera featuring men with big hair and egos. Except the economic consequences are serious.

Economic Analysis

• Hitting the gas | ECB makes its stimulus move, Fed still seen planning to cut interest rates
• Factory investment | China's manufacturing outlays to stay hamstrung on trade dispute

Coming Up

• Sept. 16: Indonesia trade balance
• Sept. 18: Japan, Italy trade balance

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Richard BravoZoe Schneeweiss

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