The White House will open its doors for the president of the European Commission Wednesday, with relations looking strained amid tariffs and the possibility of an all-out trade war.
Jean-Claude Juncker, who heads the EU’s executive arm, will meet President Donald Trump in an attempt to overcome their differences, specifically on car tariffs. Trump wants to increase tariffs on European cars exported to the U.S. to reduce the trade imbalance with the continent. But the EU sees these tariffs as an economic threat and is preparing retaliatory measures.
Just hours prior to the meeting, the EU's trade commissioner Cecilia Malmstrom told Swedish newspaper Dagens Nyheter that the EU will put tariffs worth $20 billion on U.S. goods if Trump goes ahead with car tariffs. Meanwhile, on Tuesday, the White House said it is preparing a $12 billion aid package for U.S. farmers hit by trade tensions.
“The relations are very tense, are at a very low point,” Danae Kyriakopoulou, the chief economist at the London-based think tank OMFIF told CNBC Tuesday, citing ongoing tensions over defense spending for the NATO alliance, climate change policy and the recently-applied fine on Google by the European Commission.
“It doesn’t set the scene for a very fruitful meeting,” she said, adding that she only expects the meeting to provide “some sort of language that’s mutually accepted.”