Nations puzzle over how to respond to US trade war as global markets gyrate

BRUSSELS (AP) — America’s trading partners wrestled with responses to U.S. President Donald Trump's blast of tariff hikes and some planned to send negotiators to Washington, while the head of the European Union’s executive commission offered mutual reduction of tariffs - while warning that retaliation was an option too.

“We stand ready to negotiate with the United States,” said commission President Ursula von der Leyen. “Indeed, we have offered zero for zero tariffs for industrial goods, as we have successfully done with many other trading partners. Because Europe is always ready for a good deal.”

But she warned that “we are also prepared to respond through countermeasures and defend our interests.”

China has already hit back against the U.S. with retaliatory tariffs and similar actions from Europe and elsewhere remain a significant possibility.

The U.S. and the EU had a zero-for-zero deal on wine and spirits from 1997 to 2018, and reducing many tariffs to zero was a goal of complex negotiations for a US-Europe free-trade deal before negotiations stalled in 2016.

Yet there was little indication Trump is ready to deal . The EU trade commissioner, Maros Sefcovic, spoke for two hours with Trump administration Friday and would say only that “we stay in touch.”

And White House trade adviser Peter Navarro told CNBC on Monday that an offer by Vietnam to eliminate tariffs on U.S. imports would not lead to a pullback on the the newly announced 46% levy on its imports to the U.S.

“Let’s take Vietnam. When they come to us and say ‘we’ll go to zero tariffs,’ that means nothing to us because it’s the non-tariff cheating that matters,” Navarro said on CNBC

Major trade partner China was taking a tougher line and accused the U.S. of “bullying” after imposing a 34% tariff on Friday on all US goods, the exact same rate Trump slapped China with in his latest round of new import taxes.

Several other countries said they were sending trade officials to Washington to try to talk through the crisis, which has cast uncertainty over the global economic outlook, hammered markets and left U.S. allies wondering about the value of their ties with the world's largest economy.

European Union trade ministers were closeted Monday in Luxembourg to weigh possible steps that could include taxes on U.S. tech companies like Google, Apple and Amazon. The European Union’s executive commission - which handles trade issues for the 27-country bloc - is set to impose tariffs on Jeans, whiskey and motorcycles on Wednesday in response to Trumps increase in steel and aluminum tariffs.

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