Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
US President Donald Trump is now turning his sights on Europe after having reached a preliminary trade deal with China/AFP

Enterprise

Trump relaunches trade battle with Europe

US President Donald Trump is now turning his sights on Europe after having reached a preliminary trade deal with China/AFP

DAVOS, Switzerland, Jan 22 – US President Donald Trump relaunched a major trade offensive against Europe on Wednesday, threatening to hit the EU with damaging auto tariffs if Europeans failed to agree a long-delayed trade deal.

With observers warning that global harmony on trade was crucial to the health of the world economy, Trump warned Europe that the US would protect its interests, on the second day of his stay at the Davos economic forum.

His interventions took the focus off climate change which had dominated the first day of event, where Trump lashed out at the “prophets of doom” who say that the world is in crisis over global warming.

“The European Union is tougher to deal with than anybody. They’ve taken advantage of our country for many years.” Trump told Fox Business News on the sidelines of the World Economic Forum in Davos.

“Ultimately, it will be very easy because if we can’t make a deal, we’ll have to put 25 percent tariffs on their cars,” he added.

Trump said that his attention would now to turn to Europe, after he sealed a trade truce with China that cooled several years of a bitter trade war that destabilised the world economy.

“I wanted to wait till I finished China, to be honest with you. I always like to be very transparent. I wanted to wait till I finished China. I didn’t want to go with China and Europe at the same time.”

– ‘Arbitrarily putting taxes’ –
Trumps comments followed a warning by US Treasury Secretary Steven Mnuchin that Washington would proceed with long threatened auto tariffs if Europeans go through with a digital tax that mainly affects US firms.

“If people want to arbitrarily put taxes on our digital companies we will consider putting taxes arbitrarily on car companies,” Mnuchin told a panel at the four-day meeting at the elite Swiss ski resort.

But France and Britain said they would push through with their digital tax plans as well as continue multilateral talks at the OECD to come up with new tax rules for Google, Facebook and other giants.

Advertisement. Scroll to continue reading.

“We plan to go ahead with our digital services tax in April,” said British finance minister Sajid Javid, emphasising that the legislation would “fall away” if there was an international solution.

“It is a tax that is deliberately designed as a temporary tax,” he said. “This year could be the year of change. There is no agreement yet but I think we should all focus on that and reach a deal this year”

Mnuchin emphasised the US was still involved in the OECD solution, but insisted that a digital tax was “discriminatory in nature.”

– ‘Something very dramatic’ –
EU-US trade relations deteriorated soon after Trump came to power three years ago and declared a war against the yawning trade deficit with Europe.

The earliest transatlantic skirmish came when Trump imposed tariffs on steel and aluminium imports, notably from the EU, which responded by taxing iconic US products, including denim jeans and motorcycles.

Trump then threatened duties on European cars, which is of particular concern to Germany, but has so far backed down under the pressure of US lawmakers.

The US and EU agreed to pursue a trade deal in July 2017 as a tentative truce, but negotiations have stalled over farming.

Trump offered an olive branch to the Europeans meanwhile, giving his backing to a reform of the World Trade Organization, the arbitrator of global commerce that he says is unfair on Washington.

“I’ve had a dispute running with them for quite a while because our country hasn’t been treated fairly,” Trump said, speaking alongside WTO chief Roberto Azevedo.

Advertisement. Scroll to continue reading.

“We’re going to do something that I think will be very dramatic,” Trump told reporters.

The EU would like to see trade conflicts resolved within the rules of the Geneva-based WTO, but instead the US has effectively shut it down by refusing to fill key jobs.

Washington had also moved this month to ease tensions on other trade fronts.

The US Senate this month voted to approve a new trade agreement linking the United States, Canada and Mexico. The United States and China also signed a long-awaited, if partial, deal to ease trade frictions.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...