Europe should use WTO Boeing win to de-escalate EU-U.S. trade spat: German finmin

BERLIN (Reuters) – Europe must use its victory in its dispute with the United States over subsidies to planemaker Boeing (N:BA) as a leverage to push for de-escalation in a broader trade conflict with Washington, German Finance Minister Olaf Scholz said on Wednesday.

The European Union on Tuesday won the right to impose tariffs on $4 billion of U.S. goods in retaliation against subsidies for planemaker Boeing.

The World Trade Organization ruling threatens to intensify transatlantic trade tensions just three weeks ahead of the U.S. presidential election.

But Scholz told Reuters that anything that stood in the way of trade was in the interest of neither of the two giant economies and the ruling should help Europe dial down the conflict rather than lead to its further escalation.

“There’s no sense in measures that affect fair trade,” he said. “So it is very clear that the decisions taken in the WTO must be used to step back from mutual threats… But it strengthens Europe’s position, and that is good.”

Speaking after Germany’s leading institutes released figures showing Europe’s largest economy recovering faster than expected from the coronavirus pandemic, Scholz warned against slackening off on social distancing.

“We will be living with the virus and its dangers for a long time to come, and so we must call on everyone to be careful and button up,” he said.

Scholz welcomed a proposal included in draft communique of finance ministers from the G20 group of large economies to extend for six months a moratorium on debts owed by the world’s poorest countries to help them during the pandemic, but said the measure did not go far enough.

“I hope for the future that it doesn’t stop there, but that countries that have lent a huge amount but not taken part in the moratorium also get involved – and also of course the private sector,” he said. “The extension has to be a starting point.”