EU's Tusk Warns Trump Trade Wars "Often" Turn Into Real Wars

Just before President Trump was set to hold his first ever official summit with Russian president Putin, the EU and China sat down for their own "pro-trade" meeting, during which European Council President Donald Tusk urged Trump, Putin - and China - to work with Europe to avoid trade wars and prevent conflict and chaos.

Speaking before Trump and Putin were due to meet in Helsinki, Tusk appealed for leaders to avoid wrecking a political and "economic order that nurtured a peaceful Europe and developing China", according to AP.

European Council President Donald Tusk

Tusk held a news conference with China's Premier Li Keqiang, following an annual EU-Chinese economic summit also attended by the president of the European Commission, Jean-Claude Juncker. They met amid mounting acrimony over Trump's tariff hikes on goods from China, Europe and other trading partners.

And in a startling warning, the former Polish prime minister went on to make the clearest warning yet that trade wars can turn into hot wars: "It is the common duty of Europe and China, America and Russia, not to destroy this order but to improve it, not to start trade wars which turn into hot conflict so often in our history."

Quoted by AP, Tusk then appealed to governments to "bravely and responsibly" reform the World Trade Organization by updating its rules to address technology policy and state-owned industries, areas in which Beijing has conflicts with its trading partners including Europe. Trump has repeatedly criticized the WTO as outdated and has gone outside the body to impose import controls, prompting warnings he was undermining the global system.

"There is still time to prevent conflict and chaos," said Tusk. "Today, we are facing a dilemma — whether to play a tough game such as tariff wars and conflict in places like Ukraine and Syria, or to look for common solutions based on fair rules."

Tusk's statement follows a similar warning from last week, when the Polish bureaucrat slammed Trump's criticism of European allies and urged him to remember who his friends are when he met Putin. Trump enraged and strained relations with Europe after he imposed tariff hikes on steel and aluminum from the EU as well as Canada and Mexico. The European trade bloc responded with import taxes on $3.25 billion of U.S. goods.

* * *

Meanwhile, China's premier Li - speaking in his new and delightfully ironic role as defender of the global free trade system - said China and the EU agreed to take steps to "safeguard free trade" and the global multilateral regulatory system. Which is ironic as China has some of the most draconian protectionist measures of any nation today.

"Given the complicated and fluid international landscape, it is important for China and the EU to uphold multilateralism," said Li.

Even more ironically, Beijing tried, and failed, earlier this month to recruit European support in its dispute with Washington, when Europe flatly turned down Beijing's offer for a Grand Alliance against the US. European leaders have criticized Trump's tactics but share U.S. criticism of China's industrial policy and market barriers.

In other words, EU admits that Trump is right, just disagrees with his unique... presentation style.

Asked whether China used Monday's meeting to try to form an alliance with the EU against Washington, Li said the dispute was a bilateral matter for Beijing and the United States to solve.

"Our summit is not directed at any third party," Li lied.

Meanwhile here is the truth: according to an EU report last month, Beijing imposed more new import and investment barriers in 2017 than any other government, making a mockery of China's grand pretense to be some grand defender of "free markets."

Chinese leaders have tried to defuse foreign pressure by promising foreign companies better treatment without changing their industrial development strategies. Translation: China will be delighted to steal the IT and process of any company that begins production in China, something which Tesla is currently considering.

On Monday, reporters were invited to watch part of a meeting between Li, the premier, and executives of European companies including Airbus and BMW AG in an apparent show of openness.

Li assured the companies Beijing would protect patents and copyrights. When a BMW executive said joint a German-Chinese agreement this month to cooperate in developing intelligent vehicles would benefit from the early release of standards by Beijing for the technology, Li asked whether he was concerned joint formulation of those standards would undermine his company's intellectual property. The executive said no.

"I want to hear if any big company here would like to make a complaint here on the theft of intellectual property," said the premier. "I don't know where my measure should target at if you don't let me know."

And while none of the executives raised concerns about intellectual property during the portion of the meeting reporters were allowed to see, that was the only thing on everyone's minds and yet when Trump voices that concern in a less than diplomatic manner, he is slammed by all sides.