With spats over Apple and Deutsche Bank and squabbles about Airbus and Boeing, approaching elections on both sides of the Atlantic are exacerbating strains in US-European economic relations.
The recent controversy over taxing the iPhone maker surely epitomizes the situation best. European authorities’ decision in late August to force the American giant Apple to pay $14.5 billion in taxes to Ireland infuriated officials in Washington and is still ruffling feathers.
US Treasury Secretary Jacob Lew has repeatedly expressed his astonishment and openly accused the Europeans of “disproportionately” focusing on US corporations.
On the other hand, the US Justice Department’s $14 billion proposed settlement with Deutsche Bank over trading in mortgage-backed securities derivatives has rattled nerves in Europe, where some accuse Washington of coming down particularly hard on foreign banks.
Add to this the US victory at the World Trade Organization this week in the battle over Europe’s purportedly illegal public subsidies to Airbus.
The matter is not yet concluded but the United States could in theory claim billions of dollars in compensation from Europe.
And to top it off, negotiations on the Transatlantic Trade and Investment Partnership, which are to resume in a week in New York, are also foundering- not only because of divergent positions but also because of the calendar.
The Americans still insist the agreement could be signed before the end of the year while President Barack Obama is still in office. The Europeans now say this is “not realistic.”
There has always been friction among the two allied sides, but this time things are worsened by the uncertainty from the coming presidential elections, set for November 8 in the US and for April in France.
