Trade Truce between the US and European Union
The trade war between the United States and the European Union benefits neither side. However, laying the groundwork needed to avoid it, or at least limit the impact, will be difficult when one of the parties is led by the unpredictable Donald Trump.
That is what makes the agreement in principle, which the presidents of the U.S. and the European Commission presented on Wednesday, an important one. As a show of goodwill, both sides agreed to create a team to negotiate the elimination of tariffs on industrial goods. The taxes on European steel and aluminum that Washington has been imposing for several weeks, although still in place, will be re-evaluated, and Brussels will do the same with the levies that were imposed on American products in retaliation.
The agreement works toward the reduction of tariffs, strengthening the energy partnership, opening a dialogue to facilitate commerce, and collaborating on reforming the World Trade Organization. For the moment, the agreement allows both parties to save face in front of their respective audiences. For now, there will be no American taxes on European cars; Germany, which would be primarily affected, will breathe a sigh of relief. In return, the European Union will import more liquefied gas and soy, an issue which has not pleased France due to the impact on its important agricultural sector. With these measures Trump has done a favor for American farmers punished by the European tariffs in his attempt to cultivate their votes ahead of the November midterm elections which many Republican congressmen and senators contemplate with fear. In fact, key figures within the party have criticized the tariffs and bailouts – $12 billion to agricultural businesses affected by the trade war – approved by the Trump administration.
The trade war is not over yet, but at least it has been scaled down. This is undoubtedly good news after the attacks and contempt shown by Trump in recent weeks toward his European partners, although it always comes at the cost of the president’s unpredictable changes of opinion. We should not forget that he also claimed to have arrived at a trade agreement with China and then later said that he had not, nor should we forget that Trump is moving increasingly away from Europe in economic, diplomatic and security terms. The defense of protectionism that the American president makes is at odds with European multilateral liberalism.
The United States and the European Union seem to have lit the peace pipe, but have yet to put words into action, and in the matter of trade, there is no simple negotiation.
That is what makes the agreement in principle, which the presidents of the U.S. and the European Commission presented on Wednesday, an important one. As a show of goodwill, both sides agreed to create a team to negotiate the elimination of tariffs on industrial goods. The taxes on European steel and aluminum that Washington has been imposing for several weeks, although still in place, will be re-evaluated, and Brussels will do the same with the levies that were imposed on American products in retaliation.
The agreement works toward the reduction of tariffs, strengthening the energy partnership, opening a dialogue to facilitate commerce, and collaborating on reforming the World Trade Organization. For the moment, the agreement allows both parties to save face in front of their respective audiences. For now, there will be no American taxes on European cars; Germany, which would be primarily affected, will breathe a sigh of relief. In return, the European Union will import more liquefied gas and soy, an issue which has not pleased France due to the impact on its important agricultural sector. With these measures Trump has done a favor for American farmers punished by the European tariffs in his attempt to cultivate their votes ahead of the November midterm elections which many Republican congressmen and senators contemplate with fear. In fact, key figures within the party have criticized the tariffs and bailouts – $12 billion to agricultural businesses affected by the trade war – approved by the Trump administration.
The trade war is not over yet, but at least it has been scaled down. This is undoubtedly good news after the attacks and contempt shown by Trump in recent weeks toward his European partners, although it always comes at the cost of the president’s unpredictable changes of opinion. We should not forget that he also claimed to have arrived at a trade agreement with China and then later said that he had not, nor should we forget that Trump is moving increasingly away from Europe in economic, diplomatic and security terms. The defense of protectionism that the American president makes is at odds with European multilateral liberalism.
The United States and the European Union seem to have lit the peace pipe, but have yet to put words into action, and in the matter of trade, there is no simple negotiation.
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