MNI: EU Wields Anti-Coercion Tool, Aims At Trump Deal-Sources
MNI (LONDON) - The European Union would deploy tools such as its anti-coercion instrument in response to any tariffs imposed by U.S. President-elect Donald Trump, but officials told MNI Brussels would avoid any knee-jerk reaction and could potentially do a deal with Washington for a joint push to remove China’s developing country status at the WTO.
While the EU has at its disposal tools including anti-dumping duties and tariffs, its anti-coercion instrument would provide legal grounds for duties if tariffs do not appear to be based on facts or on sound economic analysis.
“For instance, anti-coercion will be deployed in retaliation where tariffs are deployed by Trump in a ‘summary execution’ style,” one official said.
Another target for trade retaliation could be the U.S. Inflation Reduction Act, which subsidises U.S.-domiciled green and clean-tech firms, another official said.
“That (approach) may include investigations of the IRA along the same lines as those the Commission undertook into China's support for its EV industry, and which eventually led to tariffs being imposed.”
But Europe is likely to try to win over Washington, they said, noting Commission President Ursula von der Leyen’s offer to buy U.S. LNG in the immediate aftermath of Trump’s election victory. Maros Sefcovic is due to take over as Europe’s trade commissioner on Dec 1, and officials said he is pragmatic and deal-oriented.
"LESS FRENCH"
“The EU will be likely to take a rigorous and a politically ‘clean’ approach to Trump,” said another source, noting that the resignation of France’s Internal Market Commissioner Thierry Breton will also mean less political pressure on the EU to take aggressive trade actions.
“It will be less French in that sense,” another said.
The continuation of veteran trade official and negotiator Sabine Weyand at the head of DGTRADE is also likely to exert a robust and steadying influence on EU trade policy. Current Trade Commissioner Valdis Dombrovskis called for a “constructive and productive engagement” with the new U.S. administration as he went into talks with EU trade ministers in Brussels.
The EU might even ally with the U.S. on some trade issues, including over China’s WTO developing status. The EU Is currently locked in a dispute with China over electric vehicles, though talks over tariffs imposed by Brussels at the end of October have stalled following the U.S. election and are unlikely to make more progress before Sefcovic takes office, officials said. (See MNI: Little Progress Likely In China-EU EV Dispute- EU Sources)
Another option for the EU will be to build a safety net of alternative export destinations, but it has a poor record in reaching free-trade deals. While EU trade ministers are pushing to try to conclude a deal with South American bloc MERCOSUR after decades of negotiation, French President Emmanuel Macron has expressed strong objections.