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US President Donald Trump meets Wednesday with European Commission President Jean-Claude Juncker, who has dampened hopes that their talks would resolve a festering trade dispute between the two key economies.

"I am not very optimistic. I know Mr Trump pretty well. I have met him frequently and know how to deal with him and know how he deals with others. We will negotiate as equals," Juncker told German public broadcaster ZDF on Wednesday.

Juncker said that the EU is "not in the dock -- we don't need to defend ourselves.

"We are here to explain ourselves and explore ways to avoid a trade war," he said.

Juncker renewed his pledge of retaliatory measures should Trump make good on his threat to slap new tariffs on EU car imports.

"We are ready to do that," he said. "We are in a position to respond appropriately right away."

Trump on Tuesday crowed that it was his tough stance and threats of auto tariffs that brought the European leader to the bargaining table.

But at home, Trump is facing increasing criticism as consumers, farmers and businesses are taking a hit from the retaliation to the raft of US tariffs on steel, aluminum, and tens of billions of dollars in products from China that he has imposed in recent weeks.

"What the European Union is doing to us is incredible," he said. "They sound nice, but they're rough."

But when threatened with tariffs on autos and auto parts, EU officials rushed to come to Washington, Trump claimed.

"Countries that have treated us unfairly on trade for years are all coming to Washington to negotiate," he said in a pre-dawn tweet. "Tariffs are the greatest!"

- 'We are ready': Juncker' -

While Juncker is set to make a last effort to talk Trump out of the auto tariffs, which would hit Germany's dominant carmakers hard, the EU has vowed a withering response if the US goes ahead.

In his remarks to ZDF, Juncker said "we are ready" with retaliatory measures if Trump slaps tariffs on EU car imports.

"We are in a position to respond appropriately right away," he said.

Brussels has already retaliated against the steel and aluminum tariffs, imposing punitive duties on more than $3 billion of US goods, including blue jeans, bourbon and motorcycles, as well as orange juice, rice and corn.

White House economic advisor Larry Kudlow said last week that Juncker could be coming to Washington with a "very important free trade offer," but the Commission dismissed that idea.

French Finance Minister Bruno Le Maire said over the weekend: "We refuse to negotiate with a gun to the head."

EU Trade Commissioner Cecilia Malmstrom, who will accompany Juncker, expressed hope for a "de-escalation" of the tensions, but said the EU is drawing up a list of more US products that could be hit with retaliatory duties if the trip fails.

Canada, Mexico and China -- the main target of Trump's trade offensive -- have also hit back with steep duties on US goods, and have filed complaints against Washington at the World Trade Organization.

While the US claims the retaliation is "illegal," the Trump administration recognized that it is doing damage to American farmers.

The Agriculture Department announced it will provide up to $12 billion in aid to farmers hurt by trade tariffs.

- Growing Republican backlash -

In an ironic tweet, Trump mocked his European trading partners.

"The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies!" he wrote.

"That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won't!"

But more voices even in Trump's own Republican Party are coming out against his confrontational stance.

Republican Senator Ben Sasse, a frequent Trump critic, said the president's trade policies recalled a past of perilous economic instability.

"This administration's tariffs and bailouts aren't going to make America great again, they're just going to make it 1929 again," he said in a statement.

And Senator Rand Paul tweeted that "Tariffs are taxes that punish American consumers and producers. If tariffs punish farmers, the answer is not welfare for farmers - the answer is remove the tariffs."

While he opposes tariffs and would prefer the administration use "better tools" to address unfair trade practices, Republican House Speaker Paul Ryan said the confrontation could produce beneficial results.

"This friction that we're having, as long as it results in lowering barriers... that's great, that is hopefully where we can end up with this."




AFP