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Abu Dhabi, UAEFriday 21 September 2018

Europe and the US are edging closer to a trade war 

German Chancellor Angela Merkel has failed to win a public commitment from President Donald Trump to halt US tariffs  on imported steel and aluminum from Europe

President Donald Trump shakes hands with German Chancellor Angela Merkel at the end of their news conference in the East Room of the White House, Friday. The German leader failed to win a public commitment from the US president to halt US tariffs on imported steel and aluminum from Europe.  Evan Vucci / AP Photo
President Donald Trump shakes hands with German Chancellor Angela Merkel at the end of their news conference in the East Room of the White House, Friday. The German leader failed to win a public commitment from the US president to halt US tariffs on imported steel and aluminum from Europe.  Evan Vucci / AP Photo

German Chancellor Angela Merkel failed to win a public commitment from President Donald Trump to halt US tariffs on imported steel and aluminum from Europe, leaving the two economic powers teetering on the brink of a trade war.

With a US tariff exemption for the European Union expiring on May 1, Merkel said she discussed trade disputes with Trump during talks at the White House on Friday, including her offer of broader trade negotiations with the European Union. She suggested the president wasn’t convinced.

“The president will decide, that’s clear,” she told reporters at a news conference alongside Mr Trump. “We spoke about the state of negotiations and our respective assessments. The decision lies with the president.”

Trump didn’t tip his hand, saying “we’re working on” making trade more fair and “more reciprocal.” He blamed his predecessors for trade imbalances: “I don’t blame the chancellor, I don’t blame Germany, I don’t even blame the EU,” Mr Trump said.

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That leaves open the possibility of a major trade conflict after the German chancellor Merkel and French President Emmanuel Macron made back-to-back trips to Washington this week to try to sway Mr Trump to extend the waiver past May 1. Germany is the world’s fifth-biggest steel exporter and the largest in the EU, according to US Department of Commerce data.

Trump has repeatedly criticized Germany and other EU nations over trade policies, saying that those allies treat the US worse than enemies do. The White House has pushed ahead with punitive trade measures that target the EU and other countries.

“Germany sends us cars. We send them cars; they practically don’t take them,” Trump said in February. “I mean, how many Chevrolets do you see in the middle of Berlin? Not too many, folks.”

Earlier this month, Trump gave the EU and other allies a temporary reprieve from global tariffs he imposed on imported steel and aluminum.

Chancellor Merkel and Mr Macron met before their visits to Washington to craft a strategy for confronting Mr Trump. During a speech to Congress on Wednesday, Mr Macron warned that a “commercial war” would “destroy jobs.”

Mr Macron was optimistic Wednesday that tariffs on steel and aluminum can be averted. The French leader said he believes that in the end Mr Trump will agree to exempt the EU, though he received no assurances to that end.

“That’s my bet,” he said. “A trade war between allies doesn’t make sense.”

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