The French ambassador to the US says the auto sector is make-or-break for a possible trade war with Europe

President
Donald Trump and French President Emmanuel Macron talk to the
media at the beginning or their in Oval Office of the White House
in Washington, Tuesday, April 24, 2018.

AP
Photo/Pablo Martinez Monsivais

• Gerard Araud, French ambassador to the United States, told
  reporters he is concerned about the possibility of a trade war
  between the US and Europe over the auto sector. 
• The embassy has released a new study showing the benefits of
  trade cooperation between the United States and France. 
• “There is an obsession by the president on trade about cars,”
  Araud said. “Every time he’s talking about trade with the
  Europeans, he’s talking about BMW or Mercedes.”

An important engine of US economic growth is also a key
sticking point in trade negotiations with Europe under the
administration of Donald Trump: the auto sector.

Trump has made a war on free trade a lynchpin of his
presidency, picking fights with everyone from key US allies like

Canada and Mexico to more adversarial
states like
China. 

Gerard Araud, France’s ambassador to Washington, believes
the US and Europe would be better served working together to
contain what he sees as unfair Chinese trade practices, rather
than bickering with one another.

During his state visit in April, French President Emmanuel Macron
“basically told President Trump, ‘we are facing a common problem
with China, you’re right to raise the issue,'” Araud told
reporters during a briefing at his official residence in
Washington.

“It’s true that trade with China is not always fair, especially
because of issues around intellectual property, but also the
problem of access to markets and public procurement. So the idea
was, Macron told Trump, you know, we should work together. 

“The reaction of Trump was ‘No way, the
European Union is worse than China‘” on trade. 

US-EU trade worries reached fever pitch ahead of EU
President Jean-Claude Juncker’s visit to the United States, but a
last minute deal on specific sectors like natural gas and medical
services helped avoid a
full-on tit-for-tat trade war.

Still, a lot remains unresolved, in part because the US is
juggling several negotiations at once, including the North
American Free-Trade Agreement, which is crucial to the auto
industry, as well as a new round of wide-ranging tariffs on
Chinese goods.

“The cars will be certainly a sort of test case in the
coming weeks and months on this European-American relationship —
if the Americans go back to this idea of tariffs on cars
or 
not,” Araud said. 
Any
substantive talks “will take months to negotiate, and we are not
sure that the president — your president — has the patience
to wait for it.”

“So the coming months will be critical to whether we have a
virtuous negotiation starting between the US and Europe and we
forget the threats the tariffs and the trade war, or whether we
go back to a trade war with the Europeans.”

The ambassador and his team were touting a new report
called “France and the United States: A deep and mutually
beneficial relationship.” As the title suggests, the analysis is
an effort to show the benefits of the trade connections between
the two countries as a way to counter US protectionist momentum
in US politics, and the findings have been shared with relevant
US senators and governors. 

“This report is a protection maybe against protectionism,” said
Renaud Lassus, the ambassador’s chief economic adviser. “This is
a demonstration that, state by state, you see the connection
between both sides of the Atlantic. And this is a demonstration
that if tariffs or sanctions were to be applied on French
companies this would be detrimental to a lot of US
communities.” 

The report finds that in 2017, “France was the largest source of
job creation through foreign direct investment in the United
States,” making French firms the third largest foreign employers
in the country.

Still, ultimately, it’s Trump himself who needs to be convinced.
And that seems like a tall order. 

“There is an obsession by the president on trade about cars,”
Araud said. “Every time he’s talking about trade with the
Europeans, he’s talking about BMW or Mercedes.”