The White House trumps its new trade agreement with the European Union after a similar agreement with Japan as a great victory. Both contracts impose tariffs 15% of most exports to the US, along with other concessions-they are in the face, lifting the threat of open trade wars and reaffirms US dominance. Financial markets advanced in the reports.
In fact, there is nothing to celebrate. Both stores are lost for all involved. The best thing to hope for is that the administration will now move to other priorities before further damage.
From a close economic point of view, the claim that the US resulted in the winner of both sets of negotiations, simply false. Tarifs are taxes. Soon American consumers will pay the most, not all the cost increase. And the problem is not just that imports will be more expensive. US manufacturers of competing products will face less pressure on competition and innovation and will also increase their prices. At the right time, these forces suppress the standard of living. Always remember that the largest defeated of the tariffs is always stored.
Such costs can be managed in the long run if the agreements are loading the line below the recent quarrels over the store. The chairman of the European Commission Ursula von der Leyen, who concluded an agreement with the US at the weekend, emphasized this point when justifying the submission of the block to the US requirements – praised the renewal agreement and predictability for consumers and producers.
If only. To begin with, both contracts, as well as those that have previously been affected by the UK, are better considered as framework agreements than completed shops. For example, what should a Japanese commitment to finance the US investment fund managed by the White House? It’s hard to say. (It was shown as a “bonus for signature” $ 550 billion. Japanese officials probably don’t see it that way.)
As part of the US-EU agreement, some European goods will be provided without customs access to the US. Which one? No one knows. In both cases, many important details need to be completed. Meanwhile, citizens in Japan and Europe have seen their governments humble, which is very likely that the growing political opposition and uncertainty.
If these specific agreements are concluded, new ones will be available – and the infected problems are not limited to business policy. If in the future the White House seeks to settle all such disputes by reviving the threat of repressive tariffs or silent threats to detaining cooperation in the area of security, the vision of stability and predictability of von der Leyen will be confirmed as a miracle.
The most dangerous, supposed triumphs of administration can now confirm their belief that the US is strong enough to require submission, unlike a real partnership, from countries she once considered friends. If so, increased instability-grief for long-term planning, investment and global cooperation across the album-will not only phase.
The power of disruption is a self -care strategy. Sooner or later it will be painfully obvious.
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(Tagstotranslate) Trade Agreement
