Trump’s trade war splits the EU; Germany upset with Juncker’s “we can be stupid too”

Trilateral meeting between Cecilia Malmström, Member of the European Commission in charge of Trade, Hiroshige Seko, Japanese Minister for Economy, Trade and Industry (on the right) and Robert Lighthizer, US Trade Representative (on the left). Date: 10/03/2018. Location: Brussels- EC/Berlaymont. © European Union, 2018 / Source: EC- Audiovisual Service/Photo: Mauro Bottaro.

The US-EU trade war starts on 23 March, with the first shot fired by Washington at 12:01 a.m. (04.01 GMT). From what we know so far, from that minute onward the American customs authorities will impose extra tariffs on steel and aluminum imports, set by President Trump at 25% and 10% respectively. However, it seems that Washington is still discussing exemptions and has already excluded the inflows from Canada and Mexico. The European Union and Japan have joined efforts in asking for the same treatment and both underline their utmost security bondage with the US.

Incidentally, the White House sites security reasons for the new tariffs, saying the US needs to reinforce home production in both sectors for security reasons. On that ground, it will be rather difficult for the rest of the world to legally confront the tariffs using the World Trade Organization structures. In first reading, these tariffs and their rationalization do not violate the WTO rules. On the contrary, the retaliation measures prepared for example by the European Union and China will be more difficult to defend in the WTO panels.

Early effects

In any case, this unprecedented American step – under the unpredictable Trump policy lines – has already had its first upshots and they are quite crucial. For one thing, they revealed some deep division in the European Union. Berlin having to lose the most from a quid pro quo escalation, is seeking a less than proportional EU retaliation in Brussels in order to avoid more American tariffs. Trump has warned the European Union that in case Brussels retaliates, the US will impose more new tariffs on car imports from Europe, directly targeting Germany. In 2017 Germany had a trade surplus of €65 billion with the US. The next EU country with the second largest trade surplus with the US is Italy, with €2.6bn.

As a result, there are unprecedented reservations in Germany, about Brussels representing all the EU member states in the trade negotiations with the Americans. Not to forget though that according to the European Union Treaties, the EU order and practice postulates that the European Commission – where all member states are represented – is the only pertinent body to handle trade relations with the rest of the world. This is one of the founding principles of the entire EU edifice. Questioning it now is like questioning the very existence of the club.

Opposing Juncker

Still, there are strong voices raised in Germany opposing what the Commission President Jean-Claude Juncker said in response to President’s Donald Trump announcement of the imposition of the new tariffs on steel and aluminum imports. According to the reliable German business news group Handelsblatt, “German government officials were attempting to de-escalate the conflict. One official told Handelsblatt that officials found the threat of retaliation issued by EU Commission President Jean-Claude Juncker as ‘very direct,’ an implied criticism. They were especially upset when Mr. Juncker called the proposed tariffs ‘stupid,’ and added, “We can do stupid too.”

Again according to Handelsblatt, Holger Bingmann, president of the German Federation of Wholesale and Foreign Trade, said it would be a fatal mistake for Europe to hit back immediately. They should leave the role of provocateur to the White House, he added. “We are in favor of a clear response,” Mr. Bingmann told Handelsblatt, “But Europeans must avoid using the same measures as Mr. Trump.”

Handelsblatt itself, a newsgroup authentically echoing the interests of the German business sector, in its section related to the tariffs issue, carries prime articles suggesting refrain: ‘Trump may have a point about EU tariffs Ifo says’ and another title, ‘EU – German split over Trump tariffs’. This is very characteristic about the mood in Germany. Ifo is the largest and most prestigious German think tank, the official economic counsel of the Federal Government.

What about Britain?

Apart from Germany, Britain poses another grave problem for Brussels in the tariff negotiations with the US. In the face of it, Brussels legally and exclusively represents London’s trade interests, still twelve months away from Brexit. But the UK expects a special treatment from Washington. On top of that, according to the Brexiteers’ side governing the country, Britain is leaving the EU mainly in order to conclude her own trade agreements with the rest of the world. It’s utterly questionable then if the Commission can effectively represent the interest of the UK.

Brexiteer champion Liam Fox, the British Trade Minister, is currently in the US traveling between Washington and New York. He told Reuters he “was optimistic about a positive resolution to a tariff exemption (for Britain), despite the closest U.S. security ally’s dissatisfaction with the plan”. Beyond reasonable doubt then, Britain is negotiating for herself an exclusive trade relation with the US, probably even to the detriment of the European Union. This is something to be expected from a politician like Fox, who doesn’t hesitate to systematically undermine any attempt by his Prime Minister Theresa May to come closer to EU’s positions regarding the terms of the Brexit.

Undoubtedly this is a crazy crazy world. If Germany and France adopt even slightly different positions vis-à-vis this American war declaration, the European Union will be gravely hurt.

 

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Poor diets may to be blame for 20cm height gaps among children, study says

UN agency chiefs issue ‘call to action’ on behalf of refugee children

European Youth Forum @ European Business Summit 2015: Why interns should matter to business

UN rights chief says ‘bar must be set very high’ for investigation of murdered Saudi journalist

Antitrust: Commission imposes binding obligations on Gazprom to enable free flow of gas at competitive prices in Central and Eastern European gas markets

Statement following the European Medicines Agency review of the COVID-19 vaccine AstraZeneca

How one change to shipping goods could change the way we live

Central Mali: Top UN genocide prevention official sounds alarm over recent ethnically-targeted killings

Parliament adopts its position on digital copyright rules

Efforts to save the planet must start with the Antarctic

Arlington, USA: kick-off of the fifth round of the EU-US boxing match

EU to spend €135.5 billion in 2014 or 6.5% less than this year

Job automation risks vary widely across different regions within countries

Stricter rules to stop terrorists from using homemade explosives

How COVID-19 vaccine efforts could help defeat other diseases

Who should pay for workers to be reskilled?

DR Congo President and UN chief meet at a ‘historic moment’ for democracy in the country

Strong support for Bosnia and Herzegovina’s integration into the European Union

3 ways AI will change the nature of cyber attacks

Women Leadership: Paths to a Humanized Medicine

Reforms in a few countries drive a decline in average OECD labour taxes

UN standing with Zimbabwe, Malawi, Mozambique as Southern Africa death toll from deadly cyclone mounts

‘Everything is still to be agreed’: informal talks between Parliament and Council on Rule of law conditionality continue

The cuts on 2014 Budget will divide deeply the EU

Chile ups foreign bribery enforcement but flawed case resolutions are insufficient to ensure transparency and accountability

Mozambique’s Beira city ‘returning to life’, elsewhere UN teams assess damage, deliver assistance

Commuters in these cities spend more than 8 days a year stuck in traffic

Gender inequality in the medicine field: two commonly issues

Solitary Britain sides with US aggressing Russia and chooses hard Brexit

State aid: Commission approves prolongation and modification of German scheme to support electricity production from renewable energy sources

Nearly three million more displaced year-on-year, warns refugee agency chief, but solutions are within reach

EU to negotiate an FTA with Japan

Is academia losing its chance to capitalize on technology?

The fat from your next takeaway meal could help clean up global shipping

COP25: UN climate change conference, 5 things you need to know

This African company is producing cashew nuts sustainably. Here’s how

Can self-charging batteries keep us connected for ever? A young scientist explains

Mobile 360 Africa 11-13 July 2017

EU-U.S. Privacy Shield: Third review welcomes progress while identifying steps for improvement

Foreign Investment Screening: new European framework to enter into force in April 2019

Mergers: Commission fines Canon €28 million for partially implementing its acquisition of Toshiba Medical Systems Corporation before notification and merger control approval

UN rights chief Bachelet appeals for dialogue in Sudan amid reports ‘70 killed’ in demonstrations

Cyclone Idai: UNICEF warns of ‘race against time’ to protect children, prevent spread of disease in flood-ravaged Mozambique

To build cities fit for the future, we need to think differently

Barcelona’s ‘superblocks’ could save lives and cut pollution, says report

The ‘ASEAN way’: what it is, how it must change for the future

How businesses can navigate a global economic slowdown

Tuesday’s Daily Brief: Disability inclusion, minimum wage, and LGBTI rights in Botswana

China Unlimited Special Report: at the heart of Beijing

Globally, youth are the largest poverty-stricken group, says new UN report

Hot air behind your cold fridge? Why the future of cooling must be sustainable

Main results of EU-Japan summit: Tokyo, 17/07/2018

3 reasons why most Africans aren’t on the internet – and how to connect them

Why cooperative and competitive federalism is the secret to India’s success

State aid: Commission approves €3 billion Portuguese guarantee schemes for SMEs and midcaps affected by Coronavirus outbreak

This AI can predict your personality just by looking at your eyes

This is what Belgium’s traffic-choked capital is doing about emissions

Why we need different generations in the workplace

‘Complacency’ a factor in stagnating global vaccination rates, warn UN health chiefs

UN rights experts ‘gravely’ concerned at spike in civilian casualties in north-west Myanmar following internet shutdown

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s