U.S. Trade Talks with EU Remain Stalled

Little progress has been made in the 10 months since the U.S. and European Union agreed to suspend threats of a trade war over cars, industrial goods and regulations.

The impasse is over whether to include agricultural goods, which the U.S. says is essential to any deal, and how to reduce a trade imbalance for cars shipped between the two trading blocs, Bloomberg News says.

European trade envoys suggest the lack of progress is because the Trump administration is distracted by its simultaneous efforts to secure trade deals with China and Japan. Bloomberg says President Donald Trump is especially eager to conclude an agreement ahead of next year’s elections.

 But Bloomberg notes that the EU faces plenty of diversions of its own. The news service cites regional political polarization, Russian security pressures, the U.K.’s fumbling attempts to decide how it will exit the EU and a widening gulf in the economic goals of France and Germany.

Last week President Donald Trump announced a six-month delay in a decision to impose tariffs as great as 25% on imported cars from the EU and Japan. Germany, which last year exported €27 billion ($30 billion) in vehicles and parts to the U.S., is especially alarmed by the prospects of the tax.

Germany’s auto industry alone generated a €22 billion ($24 billion) trade surplus with the U.S. last year, Bloomberg says. But analysts widely agree that a blanket 25% U.S. tariff on imported cars would cause significant harm to all economies involved.