President Trump is not a fan of the European Union. He said on several occasions that the block had been created to “screw” America, is committed to slapping large prices on its cars, and this week has promulgated global steel and aluminum samples which should reach around $ 28 billion in block exports.
But for months, EU officials hoped to be able to bring the American president, avoiding a painful trade war. They tried to reach the administration With easy victories – as the accelerated European purchase of American natural gas – while pushing to conclude an agreement.
It is now clear that things will not be so simple.
When American steel prices, aluminum and products that use these metals started on Wednesday, Europe reacted by announcing a package of prices for full -fledged reprisals. The first wave will take effect on April 1, imposing prices of up to 50% on products, including Harley Davidson Motorcycles and Kentucky Bourbon. A second wave will come in mid-April, targeting agricultural products and industrial goods that are important for republican districts.
European officials were clear that they were not impatient to take this aggressive step: they wanted to negotiate, and they always do it.
“But you need both hands to applaud,” said Maros Sefcovic, Minister of Commerce of the European Commission on Wednesday. “The disturbance caused by prices is avoidable if the US administration accepts our prolonged hand and works with us to conclude an agreement.”
Trump reacted Thursday to the decision of the European Union, calling “bad” in social media job And threatening to retaliate with a 200% price on champagne, wine and other alcohols in France and through the European Union if the block does not withdraw from its prices on whiskey.
While a trade war in tit-for-tat between En Marche, Europe is faced with a difficult reality. It is not clear for many European officials what Mr. Trump wants exactly. The prices are sometimes explained by administration officials as an effort to level the rules of the game, but they are also mentioned as A tool to collect funds For us, the chests, paid for tax discounts, or floated as A way to punish the EU For its regulation of technological companies.
Trump said that Europe had “not been fair” with his negotiation practices, and on Thursday, he called the “hostile and abusive” block.
On average, Europe’s prices are just slightly higher that American prices – around 3.95% on average, compared to 3.5% American on European goods, based on an ING analysis. But it is true that some products are faced with prices, especially higher when shipped to Europe – cars, for example, are 10%tariffs.
Mr. Trump also challenged the way Europe and other nations tax producersAnd suggested that future American rates will also respond to these policies. Partly because of this, some of the rate rates that he has floated – like 25% on cars – would be far above those he criticizes in Europe.
The Trump administration also did not seem eager to roll and treat. Mr. Sefcovic went to Washington in February, but he recognized that he had made little progress during this trip. President Trump did not speak individually with Ursula von der Leyen, the president of the European Commission, since his entry into office.
Without a clear understanding of what stimulates Mr. Trump, and without confidence intermediaries within the administration, it is difficult to understand how to conclude an agreement that will prevent pain for consumers and businesses.
“It does not seem very transactional, it seems almost imperial,” said Penny Naas, a commercial expert from the German fund Marshall. “It is not a competition and a catch – it is a” you give “.”
This is why the EU now underlines that it can retaliate if it is forced, and that it will be more to come if the Trump administration goes ahead with the additional rates it has threatened. The block aims to maintain its measures proportionate to what the United States does, in order to avoid climbing the conflict.
But it has also been preparing for months for the possibility of a total trade war, even if it hoped to avoid one.
“If they advance with them, we will respond quickly and forcefully, as we did today,” a spokesman for the European Commission said on a press conference on Wednesday. “We are assiduously preparing for all these results. We have shown today that we can respond quickly, firmly and proportionally. »»
The question is what could come.
Mr. Trump has promised additional rates on European goods, especially what is called reciprocal It could happen on April 2. He also spoke of considerably moving prices for specific products, such as cars.
“It will be 25%, in general, and it will be on cars and all other things,” Trump said at the end of February comments in the oval office. “The European Union has been formed to screw the United States. This is the purpose of that, and they have done a good job, but now I am president. »»
European officials have been clear that if things become bad enough, they could use a new anti-coercion tool that would allow them to put prices or market limitations on service companies. This could mean technological companies, such as Google.
While Europe sells in the United States more physical goods than it buy, it manages a large deficit with the United States with regard to technology and other services-largely because Europeans are a large market for social media and other Internet companies.
Mr. Sefcovic has listed the anti-coercion tool as hypothetical option “Protect” the European market against external interference, and other European leaders have been vocal On the possibility of using it in particular in the United States.
But since Europe does not want to aggravate the trade war, American technological companies are considered a tool for more extreme circumstances.
“It’s no longer the nuclear option,” said Carsten Brzeski, a global economist for ING research.
For the moment, European officials hope that the threat of reprisals will be enough to drag America to the negotiating table. The measures should strike significant products in republican bastions: the bourbon of Kentucky, the soy of Louisiana.
While workers and businesses are looking at dark forecasts, the theory goes, they call their political contacts and serve them to negotiate.
The spirits industry – ready to be struck hard by 50% of whiskey rates – has already expressed an alarm. The industry was seriously affected by a previous and less extreme version of reprisal rates during Mr. Trump’s first administration.
“The reproducing of these debilitating prices at a time when the spirits industry continues to face a slowdown” “will further reduce growth and negatively impact distiller and farmers in the States across the country,” said Chris Swonger, the director general of the distilled coucil spirit, on Wednesday.
Political turbulence is already cause pain in certain American companies. Tesla sales in Germany February And collapsed through Europe, stressing the anger against Elon Musk, the director general of the company and a close ally of Mr. Trump.
But the administration indicated a desire to accept economic pain in exchange for its long -term commercial objectives – which concern nothing less than the rewriting of the rules of global trade.
“There is a transition period, because what we do is very tall,” said Trump in a Interview on Fox News Sunday.
For Europe, a world where Mr. Trump is determined to reorganize the World Order is more treacherous. The unfolding conflict is likely to definitively compromise its most important commercial relationship, which it has long considered mutually beneficial, while damaging its close alliance with the United States.
“There are not two savings in the world as integrated as the United States and Europe,” said Ms. Naas. “Decoupling is not really an option, for the moment, so now we are going to be stuck in this price paradigm.”
Ana Swanson Contributed reports.
