Trump's tariffs threat: how should Europe respond?
Speaking via video at the World Economic Forum, US President Donald Trump called on companies across the globe to manufacture their products in the US. Thanks to his administration's tax cuts and cheap energy from oil and gas, there was "no better place to create jobs," he declared, adding that those who do not produce in the US will have to pay tariffs to access the US market. Europe's press discusses the EU's options.
EU must emancipate itself
It's time for Europe to redefine its policies, Index notes:
“Europe must distance itself from harmful green policies (at least what is considered green policy today) ... Instead it must re-industrialise, first and foremost by returning to (or, if it has not yet done so, introducing) nuclear energy and securing its own energy independence (and independence from America and Russia); it must create its own security architecture, one which is completely or partially independent of America and Nato – and perhaps a European army! ... Without going so far as to chant 'MEGA' (Make Europe Great Again), one can say that it is necessary to make Europe strong, secure and resilient. ... Then we can thank ourselves and, by extension, Donald Trump.”
Investor confidence is decisive
The EU must wake up in terms of economic policy, warns Trends-Tendances:
“The markets will not trust Europe unless it undertakes structural reforms. It must review its fiscal and regulatory competitiveness, provide comprehensive financing for innovations and, above all, establish credible energy and military autonomy. Otherwise, European indices will continue to underperform vis-à-vis Wall Street, funds will favour the US market and the euro could once again become an adjustment variable against the dollar. The question is no longer whether Trump will shake up the global balance - he already has - but rather: will investors still believe in Europe?”
Use our trump cards
NRC urges Europe to look on the bright side:
“Europe has a unique selling point: legal and political security. Companies find it difficult to plan when policies are completely reversed every four years, as in the US, and the legal system threatens to become an extension of presidential despotism. This is not to say that there is nothing to improve or reform in Europe. Quite the contrary. The list is long, and time is pressing. But an overly pessimistic attitude is uncalled for. The fact that the US is now behaving radically differently doesn't mean that the old continent has to do the same.”
Switch the focus to trade with other partners
Europe is trying to detach itself from the US in terms of economic policy, eldiario.es observes approvingly:
“Brussels seems to be changing its super-Atlantic discourse. In the face of Trump's wave of destruction, Von der Leyen is trying to reinvent a more balanced and cooperative trade and investment relationship with Beijing. ... This puts her in line with China's Vice Premier Ding Xuexiang. However, a mega investment deal between the EU and China is still a distant prospect. ... In Davos, Europe is rediscovering the big world: there's more than the US out there. It will certainly be on the lookout for opportunities in Southeast Asia, Africa, Mexico, Mercosur and Chile. If Brussels sets its gigantic trade policy and diplomacy machinery in motion, it could achieve a great deal.”
This will backfire
Trump will harm his own economy if he makes good on his trade barrier threats, The Economist warns:
“Manufacturing as a share of American employment has fallen since Mr Trump's first tariffs went into effect. Companies in industries directly protected by tariffs during Mr Trump's first administration – notably steel and aluminium – did indeed increase their revenues. But that gain came at the expense of the thousands of downstream companies that suffered from higher input costs. Put another way, America protected the parts of its economy that were struggling in the global marketplace by imposing burdens on its most competitive industries.”