Europe is finding it hard to follow the actions that U.S. President Donald Trump has taken on global trade, a top European Union (EU) official told CNBC Saturday at the European House Ambrosetti Forum.
Trump has taken several unilateral actions deemed by Europe as damaging to global trade. The president’s comments on Twitter as well as sudden decisions to impose new tariffs on imported goods are “quite unconventional” and difficult to understand by European policymakers.
“Sometimes, at least for the Europeans, it is a little bit difficult to follow,” Jyrki Katainen, Vice President of the European Commission told CNBC’s Steve Sedgwick.
According to the former Finnish prime minister, Trump should use the rules under the World Trade Organization (WTO) to settle all the disputes affecting the U.S.’s trade deficit.
“President Trump is using quite unconventional methods on trade…but there’s been a lot of words, little implementation, which is good,” Katainen said.
Since the start of March, the rhetoric involving global trade has toughened after Trump’s decision to impose metal tariffs, including on its own allies. Since then, a couple of countries have avoided the higher duties, including Europe and Canada, but others like Japan and China haven’t.
China seems to be the biggest target, after the U.S. concluded that Beijing’s trade actions have meant a loss of billions of dollars to the U.S. economy, due to the presence of counterfeit goods and pirated software. U.S. tariffs worth $60 billion have therefore been put forward and an additional $100 billion are being studied.
“If it goes too far, then it’s the end of multilateralism,” Katainen told CNBC about the ongoing trade disputes.
“I don’t see this to happen yet,” he added.
In fact, according to Katainen the trade tensions between both the U.S. and Europe have calmed down in the last few weeks.
U.S. President Donald Trump threatened in March to impose tariffs on European steel and aluminium products. The 28-country-bloc responded with its own list of tariffs on U.S. products as a retaliation measure. However, the U.S. decided in the end to temporarily exclude Europe from its metal tariffs, thus avoiding a deterioration in their current trade ties.
“We are negotiating or discussing with the United States…at the moment and things are calming down, at least a little bit,” Katainen noted.
“We don’t know what is the final outcome of these discussions, but the situation is more calm now than it was two weeks ago,” Katainen said.
When asked about this weekend’s election in Hungary, Katainen expressed concerns about a potential third consecutive term for Victor Orban.
“I must admit that I’m quite worried about the trend or tendency where some political leaders are questioning or putting pressure on rule of law, liberal democratic values. This kind of trend is much more worrisome than Brexit,“ he said.
“At the end of the day we make a compromise with the U.K., we can settle the issue, but we cannot make compromises on rule of law or fundamental value-related issues,” the Finnish official said.
Hungary’s long-time premier has been one of the most vocal leaders against Europe’s migration policy. He believes that the European culture is under threat given the high influx of migrants.
“So I encourage very strongly our member states to be vocal if they find in some member states there are problems with fundamental values or rule of law.”
