(Bloomberg) -- The European Union must be ready to defend itself against protectionist trade measures by other countries, including any new steps taken by Donald Trump when he returns to the White House later this month, the bloc’s industry chief said.
In an interview with Bloomberg TV, Stephane Sejourne said the bloc has offensive and defensive tools to defend its industries, including potential tariffs on US imports and financial support to European businesses.
“Across the globe, markets are increasingly protective, with aid making our industries uncompetitive. This must be addressed,” Sejourne said. “This marks the end of European complacency.”
Sejourne, who holds the title of executive vice president for prosperity and industrial strategy, said he still hopes to convince Trump that a trade war would harm US businesses by limiting access to the EU, which is home to 450 million consumers. “We have everything to lose from a collective trade war.”
Across the world, businesses haven’t been waiting until Trump’s inauguration on Jan. 20 to see what exactly he ends up targeting with tariffs, with many trying to rush products into the US through strained supply chains.
Trump has openly threatened the EU, China, Canada and Mexico with higher duties on imports unless leaders take various actions, including cracking down on illegal migration or buying more American products. He has also repeatedly accused Europe of treating the US unfairly.
In 2018, Trump caught Brussels by surprise when he hit European steel and aluminum exports with tariffs. In response, the bloc targeted politically sensitive companies with retaliatory duties, including Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans.
Since Trump’s win in 2016, the EU has adopted several trade defense tools, including an instrument to respond to economic coercion.
“I’m prepared to explore both defensive and offensive actions with my colleagues,” Sejourne said.
Sejourne, a longtime aide to French President Emmanuel Macron who most recently served as foreign minister, also called for a more meaningful single European market for the telecom and finance industries, saying the bloc needs to hold a public debate on the topic.
He shied away from the idea of new joint borrowing to fund Europe’s industrial needs, but pitched a competitiveness fund that could help pay for the infrastructure that traditional industries, notably steel and autos, need to help them decarbonize while staying on the continent. He also said that sectors of the future, such as clean tech and biotech, would need a system of financial guarantees to lower their cost of capital.
“There is no car industry or wind industry without steel,” he said. “If we want to be able to build them in Europe — cars and wind turbines in the frame of climate neutrality — we need a European steel industry.”
--With assistance from John Ainger, Oliver Crook, Andrea Palasciano and Ewa Krukowska.
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