7 days later, the 50% tariff is coming? Only this time, Trump will turn his gun on the EU, perhaps trying to force allies to "encircle" China.

Trump issues ultimatum to the EU

According to the observation website, local time on May 23rd, Trump suddenly issued an ultimatum to allies on his social account, threatening to impose a 50% tariff on the EU and officially start it on June 1st.

Trump claimed that the original intention of the establishment of the EU was to take advantage of the US, and listed several "crimes" such as trade barriers, value-added tax, and corporate fines, with dissatisfaction towards the EU clearly shown in every word.

He also complained that there had been no progress in the negotiations between the US and the EU. As soon as he said that, the three major US stock index futures all fell, and the main European stock indices also dropped simultaneously.

In fact, the so-called "no progress" is likely because the EU did not fully accept the demands proposed by the US side. Therefore, Trump began to vent his anger at the EU, using the "maximum pressure" tactic which came naturally to him. In his view, through this tough approach, he could force the opponent to submit.

Not long ago, the EU still submitted a revised version of the trade proposal to the US side, covering the cancellation of tariffs on non-sensitive products, energy, and digital field cooperation, attempting to bridge the gap between both sides and promote positive progress in trade negotiations.

However, the US side showed a cold attitude towards this. US Commerce Secretary Rosthernk directly said that some trade negotiations with the EU were impossible, and even hinted that Germany "wanted to talk but was not allowed". Now, the EU has received the US's final ultimatum.

Trump's social account

What's more intriguing is the timeline. Just after the G7 finance ministers' meeting ended, the US eagerly targeted the EU. It's hard not to suspect that this is the US's retaliatory tariff measure. Why do I say so?

According to the message revealed by US officials, the Trump administration once proposed a "unified China tariff policy". Literally speaking, the US intended to bring allies on board to jointly launch a united tariff against China, in order to force China to make concessions in subsequent trade negotiations with China.

However, this G7 meeting can be described as hastily concluded, with participants stating that no discussions about tariffs were held. Whether they didn't discuss or failed to reach an agreement remains unknown. The joint statement after the meeting that downplayed tariff differences might be interpreted as "the US failed to rally allies".

Now, Trump chose to issue threats at this time, and the timeline seems too coincidental, obviously as punishment for allies who "did not listen".

The 7-day buffer period he reserved may not only be a negotiation window but also a deadline for the EU to submit its "declaration of allegiance", creating intimidation to make the EU "bow" to the US.

US Treasury Secretary

Moreover, the US is trying to create "internal division" to force the EU to comply. On one hand, it threatens the EU's economic lifeline with high tariffs; on the other hand, it tempts other allies with "trade agreements". For instance, the US Treasury Secretary mentioned that negotiations with India were "progressing smoothly".

However, according to Bloomberg's report, the EU has made preparations. If the negotiations with the US fail or do not meet expectations, the EU will impose additional tariffs on US exports worth 95 billion euros and impose a 25% tariff on cars and car parts.

From Trump's reaction this time, the EU did not act as expected by the US, which also made Trump angry and embarrassed.

In this prolonged trade game, China will always maintain sufficient strategic composure and patience. Time will prove that cooperation based on equality and mutual benefit is always more vital than the hegemony of bullying the weak.

Whether Trump's tariff threat is just political theater with "big noise but small action" remains to be seen in 7 days. However, it is certain that the US strategy to try to unite allies to encircle China will not succeed easily.

Original article: https://www.toutiao.com/article/7507880027918008843/

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