Trump's Trade Stick Falls on the EU, What to Do?

There is no room for leniency or negotiation, regardless of whether you are an ally. US President Trump has issued another ultimatum. He announced that tariffs of 30% will be imposed on the EU and Mexico, effective August 1, and these do not include separate tariffs on specific industries such as steel or automobiles. Earlier, Trump also announced that Canada would be subjected to tariffs as high as 35% from August 1, and Canada is also one of America's closest neighbors.

French President Macron immediately condemned it strongly through the X platform and invited the European Commission to "use its available tools to accelerate the preparation of credible countermeasures," he said that now is the time for the European Commission to resolutely express its determination to defend the overall interests of the EU. He also said that France firmly supports the European Commission continuing to negotiate with the United States, aiming to reach an agreement that respects the interests of both sides between now and August 1.

European Commission President von der Leyen also spoke in a similarly severe tone, she said: "Imposing a 30% tariff on EU exports will disrupt important transatlantic supply chains, harming the interests of businesses, consumers, and patients on both sides of the Atlantic." She also stated, "We are always ready to continue efforts to reach an agreement before August 1. At the same time, we will take all necessary measures to protect the interests of the EU, including taking appropriate countermeasures when necessary."

Although the EU had previously prepared to impose retaliatory tariffs on approximately 21 billion euros worth of American products, it was not implemented, mainly because there was hope to resolve the EU-US tariff issues through negotiations. However, Trump's trade stick fell brutally. Moreover, Trump warned that if the EU takes retaliatory measures against the US, in addition to the 30% additional tax announced on Saturday, he would also impose the same amount of additional taxes on European products entering the US.

Trump's trade strategy is full of contradictions for his own country in the long run, but for the EU, it is a serious real threat. Although the EU is the main ally of the US, from now on, more than one-fifth of the EU's exports absorbed by the US market face the threat of heavy taxes. Originally, the impact of Russia's invasion of Ukraine on Europe's energy supply, as well as China's increasingly aggressive mercantilism, have already severely hit European industry. Trump's decision is like adding insult to injury for the EU.

Moreover, the EU's situation is even more embarrassing, first, its security depends on the US, second, it also relies on the US in financial and digital infrastructure. In addition, the divisions among member states have exacerbated the EU's difficulties. These divisions are usually economic in nature: for example, Germany is concerned about its car exports, Ireland is concerned about its pharmaceutical industry, as its growth is largely due to the tax attractiveness of the country to US multinationals. But these divisions also have ideological factors: EU countries have to contend with Hungary under Orbán and Italy under Meloni, two countries that openly show their close relationship with Trump.

Professor Sébastien Jann of the École Nationale Supérieure des Arts et Métiers in France told Le Monde: "Whatever the case may be, 'giving in to American trade extortion is a mistake.' He believes that although the escalation of the situation is not in anyone's interest, especially not in Europe's, the direct economic cost of making some concessions seems acceptable. However, these concessions may have far-reaching consequences. First, even making certain concessions may not cancel most of the existing additional tariffs, let alone future inevitable tariff measures. Even if the tariffs on car exports or other products are reduced through negotiations, this will certainly not be painless for European companies."

Secondly, this will come at a high political cost: abroad, it will expose Europe's submission to Trump's orders; domestically, it will give the impression of unconditionally accepting everything with economic aggression characteristics, even sacrificing the consistency of European projects for departmental interests. Finally, choosing reconciliation could further damage the already fragile multilateral trading system. With the Trump administration imposing tariffs on specific customers, modern "unequal treaties" could fragment world trade. The EU's raw material and energy supplies are highly dependent on imports, and this instability would bring huge losses to the EU.

Experts believe that it is wrong to accept most of the US demands without corresponding compensation. Concessions need to be made to break the deadlock that is harmful to all parties, but these can only be part of a balanced, non-discriminatory package. Most importantly, these concessions must be part of a strategy to ease the growing tension in international relations. Not yielding to the US's threats is a prerequisite for maintaining Europe's credibility towards third countries. In addition, it must ensure the overall consistency of Europe in international trade: the EU must also respond effectively to China's mercantilism. If we yield now, it could accelerate the chaos in world trade while avoiding a trade war.

Source: rfi

Original: https://www.toutiao.com/article/1837495515151769/

Statement: This article represents the views of the author himself.