Source: EuroStat

U.S. President Donald Trump has approved tariffs worth USD 50 billion on import of goods from China. China will respond with retaliatory tariffs on USD 50 billion of U.S. products such as cars, planes and soybeans.

The U.S. Trade Representative has found that

Section 232 of the Trade Expansion Act of 1962 authorizes the U.S. President to impose import restrictions to protect U.S. national security.

1. Under Section 232, the Commerce Department initially conducts an investigation to determine the effects of imports on U.S. 'national security'.

2.  The term 'national security' is not defined, although Commerce has indicated in past Section 232 investigations that a threat to U.S. national security can arise either:

(i) by fostering U.S. dependence on unreliable or unsafe imports;

Barriers

Germany is among the countries that have much to lose in case of an escalation of the current trade dispute with the U.S. Therefore, despite President Donald Trump’s administration imposing tariffs on steel and aluminium from the EU, Germany favours continuing talks and seeking compromise. Germany’s caution is beneficial: it reduces the risk of a political crisis in transatlantic relations, protects economic interests, and creates an opportunity to block the construction of the Russia-backed Nord Stream 2 gas pipeline.

Active Lobbying Required

European firms maintain their dominant foreign investment position in the United States. Of total U.S. inflows of $385 billion in 2016, 72% were from Europe, with inflows from Europe totaling an estimated $277 billion for the year. That reflects the strategy of European firms to be “inside” the world’s largest and most dynamic market.  

Ranking of Top 20 States by jobs supported directly by European investment (Thousands of employees) (2014)

1. Acknowledgement that free, fair and mutually beneficial trade and investment, while creating reciprocal benefits are key engines for growth and job creation.
2. Underlining the crucial role of a rules-based international trading system and fight against protectionism.
3. Bilateral, regional and plurilateral agreements must be open, transparent, inclusive and WTO-consistent, and they should complement the multilateral trade agreements.
4. Commitment to modernize the WTO to make it more fair as soon as possible.

U.S. exporters and investors face persistent barriers to entering, maintaining, or expanding their presence in certain sectors of the EU market. Some of the most significant barriers have endured despite repeated efforts at resolution through bilateral consultations or WTO dispute settlement.

TECHNICAL BARRIERS TO TRADE / SANITARY AND PHYTOSANITARY BARRIERS

Technical Barriers to Trade

According to IMF data from 2016, the US and EU are each other’s top export market and second source of imports after China. Both the European Union and United States generally offer reciprocally open access to each other's exports. American exports to Europe are subject to duties averaging 3.0 percent close to the 2.4 percent average the United States imposes on European goods and services. According to the World Trade Organization, however, in 2016 the US imposed minimum import duties of 3.5 percent while the equivalent rate in the European Union was 5.2 percent.