Trump rejects Europe’s offer for zero car tariffs; he had personally tabled that idea in July

Jean-Claude Juncker, President of the European Commission (in the middle), accompanied by Cecilia Malmström, Member of the EC in charge of Trade (on the left) visited the White House in Washington D.C., where they participated in meetings with American President Donald Trump. Date: 25/07/201. Location: Washington – White House. © European Union, 2018/Source: EC-Audiovisual Service / Photo: Etienne Ansotte.

The US-Mexico trade agreement, with or without Canada on board, targets Europe aggressively. For one thing, it will make life difficult for the German car companies which produce in Mexican assembly lines and sell in the US. Last Thursday, the European Sting reported the hidden sides of the US-Mexico trade deal in an article entitled, “The US-Mexico trade deal a threat for others, Trump to single out China, Europe”. Only hours later, it became apparent that the Trump administration had designed the favorable trade agreement with their southern neighbor to target Europe. Let’s see why.

The fact that European stocks fell, even in view of the superficially positive news of the new North American trade deal, is an infallible sign of its anti-European content. The pan-European stock index STOXX600 fell more than half a percentage unit. The German stocks index DAX.GDAXI, being directly influenced by the US-Mexico deal, fell by more than a full percentage unit, the largest drop for weeks. Stock index changes aside, there are hard facts which support European Sting’s assertion.

All car tariffs to zero

Also, last Thursday, and less than forty eight hours after the White House announced the deal with Mexico, the European Union Trade Commissioner, Cecilia Malmström, informed a group of European Parliamentarians that Brussels may go as far as to zero the tariffs on imports of American autos. She stated, “the EU is willing to bring down even our car tariffs to zero, all tariffs to zero, if the U.S. does the same”.

This was a major concession from Brussels. Actually, it was a clear European fallback in view of the American demands. It was exactly what the US Ambassador in Berlin had proposed to the CEOs of the German automotive companies early last July. For a moment, the top management of the German automotive companies thought that all their American troubles were over. Facts speak for themselves.

Zero car tariffs? No!

On 12 July, the European Sting reported, “the US Ambassador to Germany Richard Grenell summoned the executives of the major German automotive firms to his office for a secret meeting. What he told them was quite unexpected. Grenell revealed Washington is prepared to propose the abolishment of all tariffs and non-tariff barriers on imports of cars by both sides. According to Handelsblatt Global – a reliable German English language online service – the CEOs of Daimler, Volkswagen and BMW were taken aback, considering this as a dream offer”.

This proposal had greatly annoyed France because her automotive sector is not so competitive as to withstand full tariff ‘disarmament’. Yet, the EU found the courage to put this proposal on the table. France proved she values the unity of the EU more than her own national interest. So, Brussels went ahead to meet the American demands. Alas, the EU discovered it was badly framed.

Trump’s game

Not later than last Thursday afternoon, Trump rushed to categorically reject Malmström’s offer for zero tariffs on car imports. As if this was not enough for the White House to show its negative intentions towards Europe, Trump was reported by ‘Bloomberg’ as saying “Europe’s trade policies are as bad as China”. No doubt then, the US-Mexico deal is a threat to Europe and China and Washington puts them, trade-wise, on an equal footing.

Clearly, during the last few days, Washington’s stance towards Brussels is becoming dangerously aggressive and the “Trump-Juncker trade truce” of 30 July seems to be a dead thing. So, the EU Commission President, Jean-Claude Juncker, couldn’t avoid intervening. Last Friday, 31 August, speaking to the German public television channel, ZDF, he said that if Washington violates the July trade truce and levies the European car imports with extra tariffs, “then we will do the same”. In short, the background of a hot autumn over the Atlantic is set.

Canada like Europe

Returning to North America, Canada finally rejected a more or less forceful adoption of the US-Mexico trade deal as Washington commandingly demanded. Still, Ottawa hasn’t repudiated the standing NAFTA, which hasn’t being invalidated by Washington. After Canada rejected Trump’s ‘imperial’ demands, the ‘America First’ President contemptuously stated ‘there was no need to keep Canada in the North American Free Trade Agreement’.

Undoubtedly, then, the entire staging of the US-Mexico deal was ‘made in America’. The five days strict deadline given to Canada to capitulate and accept a disparaging trade deal was tailored to be rejected. The target is, very probably, to altogether cut Canada out of the US market.

If Washington reserves such an inimical stance for Canada, one can imagine what the American treatment will be for Europe. His rejection of zero car tariffs after Malmström adopted it is a monstrous game. As explained above, he now rejects a proposal which the US ambassador to Berlin made to German car producers, informing them the idea was coming from the White House. No doubt, the White House is complotting against Europe and tries to ridicule her representatives. Surely, the worse is to come. Canada and China will also be targeted.