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Engage Trump to avert 'trade war': Barroso

Rebecca Le May
Jose Manuel Barroso says US trading partners must do all they can to avoid a "full scale trade war"

Countries facing new US tariffs must engage with US President Donald Trump to avert a "full scale trade war", the former head of the European Commission has told a mining conference in Western Australia.

Jose Manuel Barroso, former prime minister of Portugal and European Commission president, was the keynote speaker at the Diggers and Dealers Mining Forum in Kalgoorlie on Monday.

While Australia has dodged levies on its aluminium and steel, President Trump has slapped billions of dollars of tariffs on goods from around the world, including from Europe and China, but also from North American Free Trade Agreement partners Canada and Mexico.

Mr Barroso, now chairman of investment bank Goldman Sachs International, said China's promise to respond proportionally had created a lack of confidence in global trade "and in global order".

"If the US wanted to rebalance their relationship with China, which I could understand, and by the way the Chinese also could understand, why take the same negative measures against Europe and Canada?" Mr Barroso said.

"Canada is the closest country to the United States. This is more difficult to understand.

"What is the rationale of these measures?"

He said a meeting between President Trump and current European Commission president Jean-Claude Juncker in Washington recently "apparently" went well and some added protectionist measures the US was planning had been "at least suspended".

But it was hard to tell as the American leader could be "idiosyncratic", Mr Barroso said, "so we don't know if it's going to last".

"I think the solution is to continue to engage with President Trump and make agreements," he said.

"It's now upon us to do everything to avoid a full scale trade war. In a trade war, there are really no winners."