London:The other governments have so far accepted the three main approaches to dealing with Donald Trump’s business threats. China has hit the US President’s tariffs hard and made him partially retreat. Canada also retreated and avoided some of the pain that Trump had caused to other countries. Meanwhile, Britain has reduced the rapid agreement that favored the United States. None of this is a model for the European Union.
The 27-member group is not China. Although its bilateral business trade, opening a new card with the United States last year was 70% more than between the US and the People’s Republic, it opens a new card, the EU is not an autocracy that can overcome Trump. If he invokes the US President, he could increase the betting by pulling the carpet from Ukraine and undermining the EU defense. American hard power gives him what geopolitical strategists call “dominance of escalation”.
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Also, the EU is not Canada. Ottawa was able to hang hard because her people were angry that Trump was trying to blackmail Canada to become part of the United States. While Sentiment Anti-Trump is high, it opens a new card in the EU, politicians who are sympathetic with it, such as the new Polish president, can still choose.
On the other hand, the EU is not the United Kingdom. Both are threatened by Russian invasion of Ukraine. However, the EU trades seven times more goods with the United States than Britain, opening a new card – so Washington must lose more if economic relations fall apart.
For the EU is another way to handle Trump’s threats: play it cool. This is more or less what Bloc does. This includes or escalate conflict or receive a bad trade. It means to be open to a good agreement if the US reduces its requirements, but are willing to play a long game if not.
One of the reasons for buying time is to help Kyiv. The longer the EU has to prepare its own support package for Ukraine, which should include a lot of cash, the less damage, if Trump eventually cuts off all the American help of the country.
The President’s own vulnerability can also increase over time. Just look at the spectacular end of his alliance with Tesla, the new Tab Elon chief opens. The fragile ceasefire stagnate with China can break down, causing more financial unrest, which cause Trump less to fight the EU. If the Supreme Court stops it with emergency powers to impose tariffs, its negotiating position will be weaker. And tariffs could hurt the US more than its anticipated victims by increasing inflation and growth.
Quick agreement?
Trump clicked in his business threats and negotiations against the EU. The current state of the game is that there are 50% of tariffs on American imports of steel and aluminum from the block, 25% of the car tariff and 10% of the so -called imprinted tariffs for most other goods.
The US President threatened to raise these mutual tariffs to 50%unless there would be an agreement by July 9. It also looks at more “sectoral tariffs”, including medicines and semiconductors.
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While the EU complained to the World Trade Organization (WTO), it delayed its own retaliation. Its negotiators acknowledge that it is unlikely that they will overturn mutual tariffs, the Financial Times, open new cards.
The aim of the block is to still avoid industry. Those on cars and any pharmacy would hurt the most. There was the opportunity to buy more US and natural gas equipment to agree.
The agreement on these lines could be good for the EU. They have to strengthen their defense and remove their purchases of Russian gas. Although it would be best to have your own weapons and energy supply, buying more from the US makes sense as a temporary measure. An important nuance, however, is that the EU should reserve the right to take steps against mutual tariffs after the WTO issues its judgment, says Ignacio Garcia Bercero, opening a new card, a former EU official.
Such a pact would include Trump quite a climb. True, shopping of weapons and gas would reduce the deficit of US goods with the EU, which was $ 236 billion, last year will open a new card. However, its administration has a number of other complaints, including tax safety and food safety, as well as digital taxes that some of its members impose on technical giants. It is difficult to see the block that agrees with something in these areas, says Simon Evenett, professor of geopolitics and IMD strategy.
Back to war?
Although the US side described the EU trade conversations last week as “very constructive, it opens a new card”, the discussion could easily disassemble. The question is how the block would react if Trump deposited higher mutual tariffs.
The EU has not yet saved any countermeasures. Although she agreed that in response to steel and aluminum tariffs, given 21 billion euros of US imports, within 14 July she postponed them to try to get an agreement. The European Commission, its Executive ARM, also consulted taxing another 95 billion euros of US imports in response to car tariffs and reciprocal tariffs. But together these measures would be equivalent to only a third of the EU imports that relate to Trump’s tariffs.
Some analysts open a new card, think the block must be harder. One of the ideas is to intervene against US services, where the US had 109 billion euros, opens a new surplus Tab with the EU in 2023. Another is to activate its “anti -monza tool, open a new card”, which would allow retaliation against US companies operating in the block. Another threatening prohibition of exports of critical goods, such as lithographic equipment necessary for the production of semiconductors.
Extreme events may require extreme reactions. But for now the EU should maintain its cold. The child alone should not be stronger or more united than it is. It should remember that Trump can be weaker over time. And it should never forget Ukraine.
(Tagstotranslate) Trump Tariffs (T) EU (T) Trade War (T) China (T) Donald Trump
