Trump’s EU tariffs threaten new rise in transatlantic tensions
US President Donald Trump threatened this week to impose tariffs on EU goods worth $11.2 billion. The move would significantly escalate economic and political tensions between the world’s biggest trading blocs and underline the hollowness of the supposed trade “deal” agreed last July between Trump and outgoing European Commission President Jean-Claude Juncker.
It also comes at an increasingly difficult moment for world trade, which is slowing partly because of concerns over Trump’s protectionist policies. Washington has already placed tariffs of 10 percent on $200 billion of Chinese imports in a dispute with Beijing, although the two sides could yet agree on a new deal this spring.
On the EU front, Trump’s US Trade Representative Robert Lighthizer announced on Monday night a list of goods that could be hit by tariffs in retaliation for EU subsidies to Airbus, the European aerospace manufacturer. This four-page list includes French cheese, wine, Champagne, olive oil and seafood such as oysters, plus aircraft.
The latest spike in tensions emanates from a long-running dispute between Airbus and Boeing, the two major civil aerospace operators. These two have been at the center of a tit-for-tat battle over subsidies by their respective governments.
While the proposed tariffs are very small as a percentage of overall US-Europe trade, they are probably a US negotiating tool to set the tone for wider, important negotiations to come, including in the autos sector. It also underlines the fragility of the Trump-Juncker deal of last summer, which, while calming transatlantic tensions that at that time had boiled over at the rancorous G-7 and NATO summits, was highly prone to reversal.
Welcome as the immediate de-escalation of tensions was, question marks hung over the deal from day one and there was an open debate on whether the ambitions would be realized, despite Trump’s claim that the agreement was a “great day for free and fair trade.” Part of the reason that many suspected the new accord could fall down is the mercurial nature of the US president, whose diplomatic disdain for the EU goes significantly beyond that of any his predecessors in the White House.
Indeed, following Trump’s latest gambit, US-EU tensions could easily surface again, given that the Brussels-based club appears to be a deep source of frustration for the billionaire. Last summer, shortly before Juncker’s visit, the US president remarkably declared: “I think the EU is a foe, what they do to us (the US) in trade.” While some have dismissed this remark as just another spur-of-the-moment presidential outburst, Anthony Gardner — who served as US ambassador to the EU under Barack Obama — tweeted at the time: “Europe wake up; the US wants to break up the EU. Remember Belgium’s motto: ‘L’union fait la force’ (Unity makes strength). Especially on trade. No side deals.”
The contrast here between Trump, with his calls for more “Brexits” within the EU, and US policy at the start of the European integration process could not be starker. Embodied by John F. Kennedy’s 1962 “Atlantic partnership” speech, the core US view then was that a united Europe would make future wars in the continent less likely; create a stronger partner for the US in meeting the challenges posed by the Soviet Union; and offer a more vibrant market for building transatlantic prosperity.
The contrast between Trump and US policy at the start of the European integration process could not be starker.
However, US attitudes have gradually become more ambivalent as integration has deepened, particularly in recent Republican administrations. In the economic arena, for instance, the drive toward the European Single Market led to US concerns about whether this would evolve into a “Fortress Europe.”
Prior to Trump, the George W. Bush administration came closest to questioning the value of European integration. For instance, the controversy over the Iraq conflict saw Washington query the benefits of EU collaboration in the security arena. On the eve of the NATO defense review in 2003, US Defense Secretary Donald Rumsfeld even drew a distinction between “old” and “new” Europe, with the latter perceived as more favorable to US interests.
However, while the Bush team eventually recognized the need to draw back from this approach, it appears Trump may not be willing to do the same and has indeed raised the rhetoric several notches. In so doing, one of the features of the current president’s approach last year was an incredible attempt to try to prize apart Germany and France, the traditional two motors of EU integration. Last June, it was reported that Trump advised Emmanuel Macron that France would be better off quitting the EU to get a better trade deal with Washington than the US is willing to offer the EU as a whole. This remarkable suggestion comes in the context of the US president’s denunciation of Germany, which he has called “very bad” because of its significant trade surplus with the US.
While the White House’s gambit in trying to split Germany and France is most unlikely to succeed, it underlines how US ambivalence about European integration has reached its apotheosis under Trump. He is the first US head of state who appears to want to not only weaken, but also splinter, the EU, and Monday’s proposed tariffs could be the opening salvo in a new period of increased transatlantic tensions.
- Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.