The European Union cannot replicate the “aggressive” US attempts to fix the trade imbalance with China despite having the same goal as Washington, Michele Geraci stressed.
“I think that on China, both sides want the same thing: Europe and the United States would like to trade more with China. We [Italy] would like to have more balance in terms of trade, we want to close the trade deficit, and the United States wants to do that, and we in Italy want to do it. So the objectives are aligned,” Geraci said.
Europe moved this year to reshape its economic ties with China, the biggest importer of its goods and a major investor in crucial EU infrastructure, after the growing presence of Chinese business prompted fears of a takeover. The United States has been meanwhile increasing tariff barriers for billions of Chinese imports.
“The US has much more flexibility: Trump almost unilaterally decided on tariffs, but in the case of the European Union you need to agree at the Commission level, we have a limited flexibility, we are not so quick at responding, it would take 6 months if we want to respond to someone’s activities,” Geraci pointed out.
China has responded to US duties with taxes of its own, sparking fears of a trade war that would hurt the two powerhouses and slow down the global economic growth. The two have imposed several rounds of tit-for-tat tariffs since June 2018 and have yet to negotiate a comprehensive trade deal. But the Italian deputy minister downplayed the risk of a full-scale trade war.
“I think this is the new normal. The US and China will need time to re-establish common ground for their relationship. I don’t think there will be a trade war, and I do not think trade will suffer a lot,” Geraci said.
EU and US trade relations with China are expected to be on the agenda at the summit of the Group of Seven most industrialized nations in the French town of Biarritz from August 24-26, where two sides to the trade spat — the United States and four core European nations — will be present.