President Trump last week called the European Union “a foe for what they do to us in trade.”
Trump imposed tariffs and steel and aluminum in early June and threatened duties on European cars – a key sector of the economy – and other sanctions if the E.U. did not give the United States a better deal on trade.
The European Union sent executive director Jean-Claude Juncker to Washington to address the situation, and in what Trump called “a very big day for free and fair trade,” he and Juncker announced an agreement to renegotiate the current trade picture and to hold off on sanctions until a deal can be worked out.
The two leaders promised to work toward zero tariffs on non-automotive industrial goods and to reduce barriers and increase trade in services, chemicals pharmaceuticals, medical products and soybeans. They also agreed to work together to reform the World Trade Organization and to have Europe buy more soybeans and liquefied natural gas from the United States.
The final item is part of Trump’s effort to punish the energy-dependent Russian economy by taking over its customers in Europe.
“Why Trump blinked,” read the headline on CNN. “It started with a kiss: how Juncker wooed Trump,” read the headline on Reuters. “Trump-Created European Trade Crisis Averted by Fake Deal,” wrote New York Magazine.
CNBC reported that the entire negotiation was not wrapped up in one day.
“U.S.-E.U. trade agreement lacks specifics and fails to eliminate issues with China,” its headline reads. The subheads read: “UniCredit called the deal ‘vague’ and one that ‘failed to elicit excitement among investors in Asia.” “There are divergences as to who won the meeting. For Trump not to follow through on a threat is not a concession!”
Jonathan Chait hit on that theme in the first paragraph of his story in New York Magazine. “For all the hype and surprisingly credulous press the announcement attracted, it amounts to little more than a face-saving truce,” he wrote. “If you’re looking for any details as to how this will work, too bad, they don’t exist.”
It was all just part of a show anyway, Chait wrote.
“The trade ‘deal’ follows the script of the ballyhooed North Korean nuclear ‘deal’ from last month. The cycle begins with bellicose Trumpian threats designed to increase American leverage. This leads to negotiations, which produce an impossibly ambitious and thoroughly vague ‘solution’ that allows Trump to boast that he has averted a crisis of his own making.”
According to CNN, Trump spent the day backing down on two fronts.
“President Donald Trump has spent weeks drawing battle lines for a trade war with Europe and courting Vladimir Putin – causing almost universal angst in Washington. On Wednesday, he blinked on both.”
The trade agreement and the announcement Putin would not visit until next year “are likely to be widely welcomed among Republicans and among U.S. allies who have been concerned by his tendency to elevate U.S. enemies while criticizing friends.”
CNN wrote that Trump “declared what appeared at first to be a stunning breakthrough in transatlantic trade amid fears of an all-out trade war.” The trade announcement “was dressed up as a huge victory, held in the Rose Garden, the traditional venue for big state announcements, and in front of a group of Republican lawmakers apparently called down from Capitol Hill to serve as a backdrop.”
Yes, increased purchases of soybeans and liquified natural gas “could be good news” for those industries.
But “in essence,” the real effect of Trump’s announcement “seemed to be to disguise a step back by the president who has imposed steel and aluminum tariffs on U.S. allies in Europe, repeatedly threatened to slap a 25 percent tariff on European car imports and blasted the European Union in public.”
It also could be argued the president used tough and unfamiliar tactics to make a major breakthrough.