Bloomberg Audio Studios, Podcasts, Radio News. Well, let's turn back to that interview now. After a tumultuous year for relations between the United States and Europe, are things starting to improve? The process to approve the Framework Trade agreementertain the US and EU agreed last summer is progressing through the European Parliament after being disrupted by President Trump's threats over Greenland?
So what next for Transatlantic ties? Were joined by Andrew Posterer and ed, the US Ambassador to the European Union. Good morning, Great to have you with us. Thanks even great to be here in the studio. Before we get into the trade conversation, I just wanted to ask you about the story that is leading our agendas this morning about Iran and the potential for US military intervention there. I'm wondering what sort of conversations you're having with your
European colleagues about that issue this morning. Are they concerned about what happens next in Iran?
Really, everything I know about that issue I learned from Paul Wallace as I was getting ready to do a TV interview on Bloomberg this morning. You know, as president President Trump wants to be the peace president and has been the peace president across the globe in a number of conflicts. But he's also willing to strike the decisively if he feels America's interest or the interests.
Of our allies are are at risk.
So I don't have any inside information, and I really have not had conversations with any of the anybody.
Nobody raises that.
I was in an event last night to celebrate the birthday of the Japanese Emperor at the Japanese Mission. We saw a number of perm reps and.
One of your best parties.
Well it's a good one. They have great food. I'll tell you that.
The Uh, it was great to see everybody, But nobody asked about Iran. That wasn't a topic. Then, you know, they you talk about the trade deal, you talk about critical minerals, you talk about regulatory reform, deregulation. Uh, but nobody really brought up Iran.
Okay, So well, let's see what happens with the deadline that that President Trump has has given and what the reaction will be its trade deal. Let's talk about it. The European Parliament has added a number of conditions, including a time limit for the trade deal of twenty twenty eight and a suspension clause if the US imposes higher tariffs. Are you happy with those conditions?
Well, the conditions came out of the committee.
These they were not they have not been passed by Parliament yet that they come before Parliament on March ninth, when they're in plnary session in Strasbourg, which I intend to go to. I think it's important for the United States to let people know we think this is a big issue. We'll be there. Then it will go. Since the Council approved the trade deal as the Commission signed it. On the theory the deal is a deal, there'll be a trilog or in the United States what we'd call reconciliation.
But there'll be a trilog here where the Council and the Parliament will discuss those amendments and we'll we'll have to see what comes out. I'd hate to compliment, I'd hate to make comment about any of them prematurely, and they really haven't been voted on by Parliament yet.
I think I think, if you're going, do you plan to what do you plan to say to the members of the European Parliament at the planary session?
But I plan to be there in case they have questions about what the United States position is on any of this and how important the trade deal is to us. I think that, you know, just my being there will I think, make a statement about how important the deal is to us. So I want to. I want to make that statement. There's also some I have friends in the Parliament now who i'd like to get together with
to see how they're doing. And I have some individuals i'd like to meet with who I haven't met with yet in Parliament.
So hopefully I'll do some of that.
But on the Sunset provision, you know that one in particular seems a little strange to me. And we just spent Josh, they so long trying to get the European Union to approve the last deal that they agreed to. When was it in July, i think right, And the United States in August did everything we promised to do in the trade deal we executed. Now we've been waiting for nine months for Europe to do anything because it has to go through this process before it can act.
And I hate to think that in a couple of years we're going to do all this again. Although President Trump might like it, he'd probably want to raise the tariffs once again, I don't know that he's I don't know that he's a big fan of lowering them to fifteen percent, but well he might be. I shouldn't comment on that. I'm only being half serious. That's probably a mistake on the radio.
But one of the issues that the European Parliament Committee took issue with was the higher tariffs that are on steel altominium products as well. There's this question of a list of derivative products that use these metals as well, which has been a particular bone of contention for the EU. Are there changes of foot there, is there a hope for progress on those issues?
Yeah, it is.
The derivatives were a big issue even before anything arose about Greenland, So that was something that Burn Longe, who chairs the committee that approved the amended the amendments to the bill and the bill that's going before the Parliament on the ninth there, he's always been concerned about that and there I am told by people I know at the US Trade Representative's office in the Commerce Department that we have what we hope is a solution to some
of those issues. We'll have to see whether it's in a solution that's acceptable to the EU. I would also mention though, that the EU's Carbon Border Adjustment Mechanism, which is another non barrier, non non tariff trade barrier, and those are mentioned extensively in the in the Framework Agreement, does basically the same thing. It puts a tax on US products that have you know, these these elements as well.
It's the washing machines and motorcycles. The same things are covered by the derivative tax end by the Carbon Border Adjustment mechanism. So hopefully we'll be able to resolve both of those issues. But let's get let's get a vote out of Parliament, let's get a bill out of the trialog proceeding, and then I think we can go from there.
In terms of the other major threads, there is this debate going on within the European Commission about the maide in Europe Plan, the rules on the preference of products made within the EU. You've talked about your concerns, they're already but you're worried about that particular issue and whether it will have a big impact on US companies if the Eupean Commission focuses on made in Europe rules, well.
They made in Europe.
Rules would be a direct contravention of the not only the terms, but the spirit of the framework trade agreement that was agreed to in Scotland, because we've agreed not to have those kinds of preferences between our two countries, and I think adopting them would would be a serious mistake. I would say, particularly in the area of defense, because we have a very intermixed defense industrial base between the
United States and Europe. Many of the weapons, the armaments that we're using not only in NATO but also shipping to Ukraine, have production capacities in Europe as well as the United States, and the machines that make them. Some are made in the Czech Republic, in Finland, some are made in the US. There's a very intermixed supply chain, a defense industrial base, and a focus on having our
defense products be interoperable. In other words, that if we are if we're a NATO member and we're producing military hardware, we want it to be we want to you know, we can't have it. You know, you working for different sized train rails or weights that are that don't work
on European highways. We have to have these things interoperable, and these by europe preference, particularly in these defense procurement initiatives, is a real threat to our defense industrial base and that worries me a lot.
Are you engaging with the European Commission on this? If you spoken to Commissioner Stefan Sorne.
Yes, And we're engaging with the Parliament, We're engaging with members of Council. Actually, Matt Whitaker, who's the US ambassador to NATO, and I have an article coming out on this next week which will be in Political which is kind of a competitor viewers. But if you guys want to run our opts, I'll talk to you afterwards.
But if you want to tell us what's in US would be uh would be useful for this because I think there's quite a lot of listening to you now, there'll be probably quite a lot of ambassadors and members of the European Commission would be quite concerned that perhaps this plan may upset the US trade relationship. Is this an issue that you could see becoming much bigger?
I think we'll negotiate.
I think we'll negotiate through this because I just don't I don't think it's a wise thing to do with particularly with respect to our defense industrial base, because the more you break that up, you know, it may it may help the economy of certain countries, but that's really not the purpose of the defense industrial base. That's really not the purpose of these funding mechanisms. If you want to have a funding mechanism to build up Europe's production capacity,
you know, have a loan program that does that. If you're making a loan, If you have a loan program. The desire their designed to help Ukraine win the war in Ukraine, to defeat the Russians. Well, then they ought to be able to buy whatever they want from wherever they want, so that they can win the war. I mean, they've been Nobody thought they would last two weeks this said, we're going into our fourth year and they're uh, you know,
they've changed warfare. Literally, they took out forty percent of the Russians. Multiply whoever thought this would all happen. So they should be able to purchase what they want. With respect to NATO, NATO member states should also be able to purchase what they want, what they need to meet
their defense needs. So when the European Union comes up with these defense procurement initiatives, these funding mechanisms, these loan mechanisms to put in European preference language can be a very dangerous things because it weakens our joint defense efforts.
Ambassador, the REALM Europe program aims to have more than fifty percent of weapons made in the EU. That that's the plan. And the question attached to that is because there are doubts in Europe about whether the US is a reliable partner for defense supplies.
Well, I'll tell you the defense industrial base is filled with joint ventures and joint efforts by American and European manufacturers, also Japanese manufacturers, and this is we have a very integrated system here.
And I think.
That that approach to military spending, to defense spending ignores many things, including the was it eighty year eighty year old NATO alliance and the effectiveness of that alligned.
Twice a lot in the past year. I think that has a lot of people questioning elements of the NATO alliance. Is it fair for them to question this element as well?
Well? Not really.
The United States is not withdrawing from NATO, and the President has made that clear and the Secretary of State has made that clear. You don't need the Ambassador to the EU to make that clear. Matt Whittaker says it. Our ambassador to NATO says it probably ten times a week. We are here. We have we have more troops here in Europe than all of the European militaries added together. You know, we've got our nuclear umbrella that protects Europe.
That's not you know, it's not going anywhere, and if it did go somewhere, it's not something that Europe would be able to replace.
So I think if Vanuel Macron would like to what's what's your view of that plan.
Well, you'd sure have to make a whole lot more.
He produce a whole lot more nuclear weapons than he has currently, and I don't know that France is in a particularly advantageous economic position to do that at the moment.
I think France, your message to the U is, but you don't have to worry about the nuclear umbrella, that that's perfectly safe.
You can't you can't match it, and and nobody's talking about taking it away. So let's let's focus on things that are actually important that we actually can do. Let's talk about strengthening NATO let's let's talk about building up the European economy, but do you regulation and having pro growth policies so that Europe can actually meet this five percent of GDP requirement that they've agreed to with NATO.
Poland was out. I think it is either the Prime minister or the President of Poland was out just last week saying, look.
We're at five percent.
But the only way we've gotten here is we've got pretty good economic growth. So tax revenue is going up because we have growth. Well, the rest of Europe really.
Doesn't have that growth.
I mean, we're seeing GDP declines, We're seeing declines and standards of living, and we need to see those things re energize. We need to see reindustrialization, We need to see Europe participating in the AI economy. We need to see the kinds of growth that Europe talks about. Competitiveness, I'm not I wish they would stop talking about how they're going to compete with other people and just talk about how they're going to grow their economy. Europeans need,
the European economy needs to grow. When it grows, it will be competitive.
Yeah, and I think there's a lot of the ministers who would agree with you that the issues of competitiveness and growth are intertwined. But you know part of the plan and you talk about intus relation is the industrial accelerator acts that's going to have we're told by the debates going on, this's made in europe life. So is that they're going about it the wrong way? There are it is action being taken by the EU and all of these fronts.
I think, I think the European Union has the right to put whatever language it wants in these agreements, whether it's to benefit Europe or to and they and they do need to do things that will benefit Europe because
Europe needs to catch up on growth, it's falling increasingly behind. However, be careful when you do it, and be careful where you do it, because if you may cut out joint ventures, you may cut out opportunities to work together on technology or research that would actually be damaging to the European economy. This is why I say we need we need pro growth policies in Europe that are focused on increasing economic growth,
and we need deregulation not simplification. It's not that the problem isn't that we've got a bunch of law regulations that are too complicated. Although you do have a bunch of regulations that are too complicated, the problem is you just have too many regulations period. And this isn't just me saying this as the ambassador from the United States, but Chancellor Merrit's has been very very vocal about this recently, as has Prime Minister Devember. They've been out saying, look,
we've got too much regulation. We've become the champion of regulation, and that's been at the sacrifice of innovation and Europe. You know, we're within I don't know, five hundred miles of the greatest accomplishments in human history from from the perspective of innovation. That's that's not happening here because we have a lack of lack of people that are innovative.
It's not happening here because they're being regulated off the continent, and it's something that needs to be addressed, I think very quickly.
Okay, well, we thank you for bringing us your analysis of thought on your viewpoint this morning. The US and Bossters, the European Union. Andrew Poster, thank you very much for.
My pleasure to both of you. Thank you