EU to begin trade talks with US as tariff threats escalate

BRUSSELS • The European Union (EU) gave the green light to start trade negotiations with the US, as both economies seek to rebuild frayed relations a week after threatening each other with billions of dollars in new tariffs over a 14-year-old aviation dispute.

EU ministers yesterday authorised talks to eliminate tariffs on industrial goods, following through on a political accord reached in July between US President Donald Trump and European Commission President JeanClaude Juncker.

The EU sought the agreement with the US president, in part to avoid levies Trump threatened on foreign automobiles and car parts.

Negotiations will start amid escalating transatlantic tensions, with the US having accused the EU of not acting in good faith and delaying the start of talks.

Trump’s car tariff warning, which would be based on the same national security grounds used for controversial duties last year on foreign steel and aluminium, will weigh heavily on discussions, with the EU bristling over the idea that it poses a threat to the US.

The EU is considering hitting US goods ranging from handbags to helicopters with retaliatory tariffs to the tune of €10.2 billion (RM47.43 billion) in a dispute over subsidies to Boeing Co.

The plan follows a US threat to seek US$11 billion (RM45.21 billion) in damages through duties on European goods to counter state aid to Airbus SE. — Bloomberg