EU seeks early US talks to avert Trump tariffs

By Philip Blenkinsop

WARSAW (Reuters) - The European Union wants to engage swiftly with the United States over President Donald Trump's planned tariffs, trade chief Maros Sefcovic said on Tuesday, while his boss Ursula von der Leyen forecast negotiations with Washington would be tough.

Sefcovic, speaking at a meeting of EU ministers, said he wanted "early engagement" and was awaiting confirmations of the appointment of Trump's picks for Commerce Secretary, financier Howard Lutnick, and for U.S. Trade Representative, Jamieson Greer.

"We are ready to engage immediately and we hope that through this early engagement, we can avoid the measures which would bring a lot of disturbance to the most important trade and investment relationship on this planet," he told reporters.

Von der Leyen, the European Commission president, said a priority was to work on areas where EU and U.S. interests converge, such as critical supply chains and emerging technologies, adding the EU was ready for tough negotiations.

"We will be open and pragmatic in how to achieve that. But we will make it equally clear that we will always protect our own interests," she said in a speech in Brussels.

In a sign of how tough negotiations will be, Trump's senior trade adviser Peter Navarro said Europe was sticking it to the United States with its value-added tax on cars. EU countries apply VAT to sales of all cars - domestic and foreign.

EU officials say contacts with the new Trump administration have been limited, noting Trump's picks for top jobs are not able to speak to foreign counterparts until they are confirmed. Von der Leyen and Trump have not been in touch since Trump's inauguration.

The EU meeting in Warsaw started just after additional U.S. tariffs of 10% on Chinese goods took effect, prompting China to hit back. Canada and Mexico were also in line for 25% U.S. tariffs on Tuesday, but each secured a 30-day pause. 

Trump has said the European Union is next in line. He has repeatedly complained about the U.S. goods trade deficit with the 27-country EU. Navarro put that at $350 billion.

Sefcovic said the deficit, including services, was around 50 billion euros, or about 3% of overall annual EU-U.S. trade of 1.5 trillion euros, while millions of jobs on both sides of the Atlantic were reliant on this open trading relationship.

"We believe through constructive engagement and discussion we can resolve this problem," he said.

Cecilia Malmstrom, EU trade commissioner during Trump's first term and now senior fellow at the Petersen Institute for International Economics, said that even without a trade war, the EU should focus on concluding trade deals with other partners.

Von der Leyen said the EU could even expand its trade and investment ties with China.

NOT THE MARRAKECH SOUK

The EU is arguably in a trickier position than Canada or Mexico. The European Commission oversees trade policy for the European Union, but needs to corral its often divided 27 members.

Its mandate is also limited to trade. If Trump wanted a deal to build a US-EU economic security alliance against China, that would be much more a matter for individual EU countries.

An EU diplomat said one outcome of Tuesday's meeting was a show of unity among members, such as that the EU responds to U.S. tariffs firmly but proportionately.

Sefcovic did not go into how the bloc might negotiate, but some ministers offered advice on the EU approach.

Luxembourg foreign minister Xavier Bettel, who was prime minister during Trump's first term, said the EU needed to be united and strong and not begin negotiations with concessions.

"This is not the Marrakech souk," he said. "We don't offer. We listen, we exchange, we say things. We don't offer."

Irish trade minister Peter Burke also said it was not worthwhile at this point to make offers.

(Reporting by Philip Blenkinsop; additional reporting by Bart Meier, Jan Strupczewski and Lili Bayer in Brussels, David Lawder in Washington; Editing by Catherine Evans, William Maclean)