Just ahead of his meeting with top eurocrat Jean-Claude Juncker set for Wednesday where the European Commission President hopes to calm the escalating trans-Atlantic trade fight, Donald Trump tweeted out “Tariffs are the greatest!”
In reference to what promises to be a contentious meeting with Washington’s “foe” – as Trump called the EU in a recent interview, Trump greeted Tuesday morning with a key theme of his presidency: “Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs… Remember, we are the “piggy bank” that’s being robbed…” and also “Countries that have treated us unfairly on trade for years are all coming to Washington to negotiate.”
Juncker told reporters last week he is “upbeat and relaxed”; however, we don’t need a crystal ball to know that things are likely not going to go well at the meeting, as Bloomberg reports that the European Commission President “won’t be coming to the White House with a ‘great deal’ on trade to counter Donald Trump’s recent criticism of the European Union and his claims it runs a $150b surplus with the U.S.,” according to an unnamed European official.
The last time the two met face to face, at the recent G7 summit in Quebec, the EU’s most senior official told fellow European leaders that Trump had called him a “brutal killer” — though possibly in the spirit of jesting, over what Trump identified as unfair EU trade policies and fines on American tech companies.
Last week Cecilia Malmstrom, the European Union trade commissioner who is accompanying Juncker on his trip, indicated he would attempt to persuade Trump against his threat of raising tariffs on European car imports, possibly wrecking a $1 trillion trade relationship which the EU says will be disastrous for both sides of the Atlantic, with 15 million jobs on the line.
Ahead of Wednesday’s meeting a European Commission spokesperson said, “It is an opportunity to de-dramatize any potential tensions on trade and to engage into an open, constructive dialogue with our American partners” — however drama is what we fully expect, as when Trump initially announced tariffs in March, Juncker vowed EU retaliation by declaring “we can also do stupid”.
Since June, US-European tensions have reached a boiling point after Trump continued imposing tariffs on steel and aluminium imports into the US. As Juncker himself again vowed in a speech last week, saying “We will continue to respond toe-to-toe to provocations,” and “All efforts to divide Europeans are in vain” — the EU in response imposed retaliatory trade taxes in early summer on a number of the country’s most famous brands, including Levi jeans, Harley Davidson motorcycles, and bourbon whiskey. As we reported earlier, companies like Harley Davidson are already reeling as profitability will take a huge hit according to the company’s latest forecast after being thrust into the middle of the trade war.
Among the many other potential issues Trump could bring up, which has European officials bracing for the worst, includes berating Europe’s ongoing attempts to salvage the 2015 Iran nuclear deal, from which the US formally withdrew in May, making the issue likely high on his mind after an epic all caps tweet threatening Iran on Monday. He’s also complained about inadequate defense spending among a most European allies, which has threatened NATO unity, and recently railed against the planned Russia-to-Germany Nord Stream 2 natural-gas pipeline while face to face with NATO leaders at the July summit in Brussels.
Trump has more recently complained of currency manipulation to boot, accusing “China, the European Union and others” of “manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge” in a tweet last Friday.
And then there’s Trump’s threat of targeting the European automotive industry with even more tariffs, saying in a June tweet, that he would slap 20 percent tariffs on European car makers, insisting American manufacturers should “build them here” in accordance with this ‘America First’ doctrine.
Junker said during the recent G7 meeting in Canada that “he would seek again to explain to Trump that the European Commission coordinates trade policy for the 28-country European Union and that the United States could therefore not forge a trade deal with just one of its members,” according to a summary of his words by Reuters.
“When it comes to trade, the European Union, its internal market, its single market, form an indivisible unity and it’s the Commission that is in charge of articulating trade policy,” Juncker said.
As Mr. Juncker goes to Washington we fully expect trans-Atlantic trade relations to further slide towards crisis mode.
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