(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.
The European Union’s designated trade chief vowed to seek speedy solutions to transatlantic disputes that threaten to trigger a cycle of tit-for-tat tariffs between the world’s two biggest economic partners.
Phil Hogan said U.S. President Donald Trump’s administration has so far refused to engage with the EU to settle commercial quarrels over matters ranging from aircraft subsidies to car exports. The rows raise the specter of the U.S. and EU imposing duties against each other that would hit tens of billions of dollars of international trade and have harmful knock-on effects domestically.
“It takes two to tango; I am ready to engage politically with the United States to resolve our trade differences,” Hogan, who is due to succeed Cecilia Malmstrom as EU trade commissioner on Nov. 1, told a European Parliament confirmation hearing on Monday evening in Brussels. “In fact, I wonder why it has taken so long for them to do so.”
The transatlantic commercial disagreements are on top of a U.S.-China trade war that has cast a pall over the global economy and come amid calls by European central bankers for EU governments to do more to spur growth.
Trump and European Commission President Jean-Claude Juncker agreed at the White House in July 2018 to a cease-fire in a conflict that had been sparked by U.S. tariffs on EU steel and aluminum based on national-security grounds and threats to introduce levies on foreign automotive goods using the same controversial justification.
After the bloc retaliated against the metal tariffs with duties of its own on a slew of American products and vowed to react the same way should the U.S. target the European auto industry, Trump and Juncker pledged to work toward scaling back transatlantic trade barriers.
“Unfortunately, we have not seen much movement on that agenda,” said Hogan, who is currently the EU’s agriculture commissioner. “I will be open to the rapid resolution of trade disputes with my U.S. counterpart.”
Complicating the picture is an imminent World Trade Organization decision allowing the U.S. to hit nearly $8 billion of European goods with tariffs as retaliation over illegal aid by EU governments to plane manufacturer Airbus SE.
The EU expects to have a chance to respond to the expected U.S. tariffs over subsidies to Airbus next year, when the Geneva-based WTO is due to fix the level of countermeasures that the bloc can take in a related case over unlawful subsidies to Boeing (NYSE:BA) Co.
Hogan expressed support for proposals that Malmstrom has made to resolve the whole dispute over aircraft aid with the U.S. He also repeated the bloc’s readiness to retaliate in turn should no negotiated deal be reached.
“It doesn’t make sense that, when we have as the European Union put forward constructive solutions to the problem that is before us, that the United States would retaliate in some particular way seeing that they would have to deal with the issue if it goes badly wrong for them on Boeing,” Hogan said. “Europe has to stand up for itself as well in terms of the products that we will identify in return.”
He vowed to pursue EU efforts to uphold the global commercial order underpinned by the WTO and to confront protectionist policies around the globe. The world needs trade “rules rather than the law of the jungle,” Hogan said.
“We must stand up against protectionism where it occurs,” he said. “The WTO is facing its deepest crisis since its creation.”