European industry chief warns tariffs should be ‘something of the past’

Good morning. Today, my colleague hears a plea from European businesses for Brussels to avoid a tariff war — regardless of who sits in the White House. And the EU’s jobs and skills commissioner lays out her plan to retrain the continent’s car workers to our economy correspondent.

Back to the future

The president of the EU’s biggest business group has said that tariffs should be consigned to history, just as the bloc braces for incoming US president Donald Trump’s aggressive trade policy, writes Alice Hancock.

Context: Trump has been anything but quiet about his penchant for protectionism, threatening blanket duties of 20 per cent on his European trading partners. In December he said that the bloc must buy more US gas — otherwise “TARIFFS!”

Fredrik Persson, president of BusinessEurope, told the Financial Times that “regardless” of who is in power in Washington or Brussels, talk of such duties should be stopped.

“History has told us that tariffs are not a good thing,” said Persson, who also chairs Sweden’s electricity grid operator Ellevio AB. “Tariffs should be something for the past and they should not be for your bigger trading partners and friends.”

The EU is preparing to wave a couple of olive branches to appease Trump, with European Commission president Ursula von der Leyen proposing that the EU buy more American fuel. At the same time, the bloc has upped the ante on its own tariffs against China, to prevent the European industry from being undercut by Chinese competition.

Persson said that Brussels’ powers to investigate grants by foreign governments to companies in the EU under the so-called foreign subsidy regulation were a “fair” tool to preserve a level playing field.

BusinessEurope, which counts 20mn member companies across the EU, is launching a report today on how to reinvigorate the bloc’s flagging economy. Boosting open international trade, taking an assertive stance towards China, and cutting burdensome regulation are among its recommendations.

Persson said that the EU’s climate aims were admirable, but warned that if economic growth did not get back on track, “we will not meet the goals whether we like it or not”.

He also suggested that migration could help fill gaps in the workforce weighing on the economy; the bloc has lost a net 3.5mn workers between 2015 and 2020 and stands to lose a further 35mn by 2050 because of an ageing population.

“We need to realise that we need migration when it comes to getting engineers etc into Europe. It is just a fact that we will not manage alone,” Persson said.

Join the FT in Davos, or online, with our line-up of events for the World Economic Forum January 20-24. See the agenda here.

Chart du jour: Trump’s divided world

Donald Trump’s return to the White House is widely seen as a “good” thing in many countries outside Europe, according to a survey by the European Council on Foreign Relations published today. Not so much here.

Training camp

As the car industry is haemorrhaging tens of thousands of jobs amid a slowdown in demand, the European Commission is looking for ways to keep manufacturing workers employed, writes Paola Tamma.

“This is a stressful moment . . . there are parts [of the industry] that are losing jobs,” Roxana Mînzatu, the European Commission’s executive vice-president, told the FT. “I also want to look at how we can create jobs.”

Context: Europe’s car industry is expected to fully transition to electric mobility by 2035, but the transition isn’t happening as fast or as smoothly as planned. European Commission president Ursula von der Leyen has pledged a “structured dialogue” to see how to help it along.

Mînzatu’s job is to take care of the nearly 14mn workers who are directly or indirectly connected to the industry. She’ll meet representatives from manufacturers and suppliers tonight, to better understand “how we can include solutions to skill, to reskill [their workforce] so that we can support them better”.

Her first goal will be to retrain people in order to keep them within a “cleaner, greener [car] industry”. “There are in the industry opportunities to use the same human resource if the skills are there,” Mînzatu said.

But electric vehicles require fewer pieces than a combustion engine car, which means there could be fewer manufacturing jobs and people might need to change career paths.

“My role will also be to make sure that by helping Europeans to equip themselves with the skills, they can transition to industries that are in some way related or connected with what the automotive sector does,” Mînzatu said.

What to watch today

1. Ukrainian President Volodymyr Zelenskyy travels to Poland.

2. European Commission presents a plan on cyber security of hospitals and healthcare providers.

Now read these

• Safety blanket: Mining companies have asked Greenland’s government for a guarantee in case the US takes control of the vast island.

• U-turn: France’s new premier François Bayrou has offered to water down a hard-fought 2023 pensions reform to get the budget through parliament.

• Next round: The EU has found that China discriminates against European-made medical devices, and is threatening to retaliate against Chinese producers.