EU vote on US trade deal is set to bring tariff peace, but for how long?

By Philip Blenkinsop

BRUSSELS, June 15 (Reuters) - The European Union is poised to implement the import duty cuts it agreed with U.S. President Donald Trump last year, averting at least for now another eruption of tariff conflict between the world's largest trading partners.

The European Parliament will vote on Tuesday on legislation to fulfil the EU's side of the trade deal struck ‌nearly 11 months ago at Trump's Turnberry golf course in Scotland.

A clear majority is expected to back the agreement that includes the removal of EU duties on U.S. imports and broad ‌U.S. tariffs of 15%.

Trump threatened "much higher" tariffs unless the EU acted soon.

EUROPEAN INDUSTRY SAYS A DEAL IS NEEDED

Industry has urged the lawmakers to back the deal and European automakers, particularly hard hit by tariffs, are already making preparations on its basis. The Turnberry ​deal removes a 10% EU import duties on U.S. cars.

Volvo Cars, which produces the majority of its U.S.-bound vehicles in Europe, will start making some of its best-selling XC60 SUVs at its South Carolina factory later this year and start producing at a new hybrid there by the end of the decade.

Fifteen business associations representing EU carmakers, as well as textiles, cosmetics and food and drink producers, said backing the deal would ensure stability for businesses that rely on annual transatlantic trade of $2 trillion .

But in a statement they said it was "not the end of the conversation".

The crucial next step will be whether Washington's new tariffs due to come into force from July 24 ‌will exactly reflect the Turnberry accord.

The two sides also need to agree ⁠to refrain from reimposing mutual tariffs on $11.5 billion of goods related to a decades-long dispute over aircraft subsidies. A five-year suspension of those tariffs is due to expire on July 11.

U.S. Trade Representative Jamieson Greer said the United States will stick to the deal, but Bernd Lange, chair of the EU assembly's trade committee, expressed ⁠doubts.

"The decision is in the White House by the president and therefore nobody knows what will really happen," he said.

Trump's warning of 100% tariffs on French wine on Monday could certainly unravel the Turnberry deal.

Lange says the European Union should, if necessary, be ready to suspend parts of the deal. It could also activate its Trump tariff countermeasures on €93 billion ($108 billion) of U.S. goods, which are suspended until August 6.

NOT JUST TARIFFS, DIFFERING PRIORITIES

Beyond tariffs, Washington and Brussels ​must ​work on other elements of the Turnberry deal and each side has very different priorities.