31 August 2018 - 08:37
Shawn Donnan, John Micklethwait, Margaret Talev and Jennifer Jacobs
SO MUCH FOR THAT: US President Donald Trump and
European Commission president Jean-Claude Juncker walk together before
trade talks in the White House Rose Garden on July 25 2018. Picture:
REUTERS/JOSHUA ROBERTS
Washington — The EU’s Jean-Claude Juncker left
Washington in late July with a Rose Garden truce — a handshake trade
agreement he had good reason to believe would spare the continent from
President Donald Trump’s wrath.
It didn’t last.
In a Bloomberg interview on Thursday the US president spoke of the European Union as though it’s likely to be his next target. “Almost as bad as China, just smaller,” he declared.
Trump’s remarks cast doubt on the longevity of his agreement with Juncker, intended to stave off a broader trade war between the US and Europe after the president imposed tariffs on imported steel and aluminium earlier this year. The transatlantic dispute has rattled markets and shaken the international order created after World War 2.
They also illustrate why Trump is still seen as a fickle dealmaker internationally, and raise questions about his ability to ever negotiate with China, or whether a deal with Canada and Mexico to revise Nafta — which appears close — will endure.
In the Oval Office interview, Trump likened a weak euro to China’s renminbi, or yuan, a currency he claims is manipulated to disadvantage US companies and undermine his efforts to right global trade imbalances.
“We’re competing against not only, not only the yuan, we’re competing against the euro,” he said. “They keep dropping, dropping, dropping.”
Trump chided Germany’s Angela Merkel for energy purchases from rival Russia that undermined the Nato alliance she so often has defended to him.
“I told her I think it’s ridiculous that you have a Nato to protect yourself from a certain country and then you’re paying a fortune to that certain country,” Trump recounted. “I said: ‘What kind of a deal is that?’”
Trump rejected overtures made by the EU just hours before the Bloomberg interview to eliminate transatlantic automotive tariffs. He threatened to pull out of the World Trade Organisation and thus severely undercut a global trading system that European powers and the US have spent seven decades building.
“I would say the WTO was the single worst trade deal ever made,” he said.
It didn’t last.
In a Bloomberg interview on Thursday the US president spoke of the European Union as though it’s likely to be his next target. “Almost as bad as China, just smaller,” he declared.
Trump’s remarks cast doubt on the longevity of his agreement with Juncker, intended to stave off a broader trade war between the US and Europe after the president imposed tariffs on imported steel and aluminium earlier this year. The transatlantic dispute has rattled markets and shaken the international order created after World War 2.
They also illustrate why Trump is still seen as a fickle dealmaker internationally, and raise questions about his ability to ever negotiate with China, or whether a deal with Canada and Mexico to revise Nafta — which appears close — will endure.
In the Oval Office interview, Trump likened a weak euro to China’s renminbi, or yuan, a currency he claims is manipulated to disadvantage US companies and undermine his efforts to right global trade imbalances.
“We’re competing against not only, not only the yuan, we’re competing against the euro,” he said. “They keep dropping, dropping, dropping.”
Trump chided Germany’s Angela Merkel for energy purchases from rival Russia that undermined the Nato alliance she so often has defended to him.
“I told her I think it’s ridiculous that you have a Nato to protect yourself from a certain country and then you’re paying a fortune to that certain country,” Trump recounted. “I said: ‘What kind of a deal is that?’”
Trump rejected overtures made by the EU just hours before the Bloomberg interview to eliminate transatlantic automotive tariffs. He threatened to pull out of the World Trade Organisation and thus severely undercut a global trading system that European powers and the US have spent seven decades building.
“I would say the WTO was the single worst trade deal ever made,” he said.
As president, there’s something really nice-sounding about the fact that our dollar is so strong and so powerful
EU officials left Washington after July’s Juncker
visit privately confessing that they knew that any deal with America’s
current president was vulnerable to his whims.
But, even as he called Juncker the “great Jean-Claude”, Trump put those whims on full display in his interview, and punctured hopes of a return to some semblance of normality in economic relations between longstanding economic allies.
EU officials were in Washington just last week discussing how to proceed with the transatlantic deal to reduce tariffs and trade barriers related to industrial goods other than cars that Trump and Juncker announced.
A separate EU mission was also in town last week huddling with US and Japanese officials to discuss how the three economic powers might take on China jointly in the very WTO that Trump lambasted.
The president made clear that for all the recent talk of a transatlantic trade peace, it is one that may not last long. A deal would require significant changes not just in the EU’s regulations and standards but in its consumers’ behaviours, and Trump expressed particular scepticism Europeans would alter their buying preferences.
“It’s not good enough” he said of the EU’s automotive tariff elimination offer made earlier on. “Their habits, their consumer habits are to buy their cars, not to buy our cars,” he said.
The “European Union doesn’t let our agricultural products in”, he went on. “They have a wall,” he complained. “It’s not even a tariff. They have a wall.”
Trump boasted that Europe’s travails — and its weak currencies at times — had helped in his past in business.
“In private life, I always liked a weak dollar and a low interest rate, OK? A strong dollar was only good if I wanted to buy Turnberry in Europe, in Scotland, or if I wanted to buy Aberdeen or if I wanted to buy Doonbeg, Ireland,” he said. “That was the only thing a strong dollar was good for.”
“As president, I feel a little bit differently,” Trump said. “As president, there’s something really nice-sounding about the fact that our dollar is so strong and so powerful. The bad news is that it makes life more difficult when you’re looking to sell product to the rest of the world.”
For Europeans hankering for a return to easier times in the transatlantic relationship, Trump did leave some room for hope.
Asked whether he could outlast the Europeans, much as he believes he can outlast the Chinese in his trade battles, Trump said he was certain of victory. But he also made clear he was ready to deal and believed the EU was too.
“They’re dying to make a deal,” he said.
Bloomberg
But, even as he called Juncker the “great Jean-Claude”, Trump put those whims on full display in his interview, and punctured hopes of a return to some semblance of normality in economic relations between longstanding economic allies.
EU officials were in Washington just last week discussing how to proceed with the transatlantic deal to reduce tariffs and trade barriers related to industrial goods other than cars that Trump and Juncker announced.
A separate EU mission was also in town last week huddling with US and Japanese officials to discuss how the three economic powers might take on China jointly in the very WTO that Trump lambasted.
The president made clear that for all the recent talk of a transatlantic trade peace, it is one that may not last long. A deal would require significant changes not just in the EU’s regulations and standards but in its consumers’ behaviours, and Trump expressed particular scepticism Europeans would alter their buying preferences.
“It’s not good enough” he said of the EU’s automotive tariff elimination offer made earlier on. “Their habits, their consumer habits are to buy their cars, not to buy our cars,” he said.
The “European Union doesn’t let our agricultural products in”, he went on. “They have a wall,” he complained. “It’s not even a tariff. They have a wall.”
Trump boasted that Europe’s travails — and its weak currencies at times — had helped in his past in business.
“In private life, I always liked a weak dollar and a low interest rate, OK? A strong dollar was only good if I wanted to buy Turnberry in Europe, in Scotland, or if I wanted to buy Aberdeen or if I wanted to buy Doonbeg, Ireland,” he said. “That was the only thing a strong dollar was good for.”
“As president, I feel a little bit differently,” Trump said. “As president, there’s something really nice-sounding about the fact that our dollar is so strong and so powerful. The bad news is that it makes life more difficult when you’re looking to sell product to the rest of the world.”
For Europeans hankering for a return to easier times in the transatlantic relationship, Trump did leave some room for hope.
Asked whether he could outlast the Europeans, much as he believes he can outlast the Chinese in his trade battles, Trump said he was certain of victory. But he also made clear he was ready to deal and believed the EU was too.
“They’re dying to make a deal,” he said.
Bloomberg
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