US tariffs: a trade war with Europe now?
Donald Trump imposed high tariffs on goods coming from Mexico and Canada on the weekend, only to suspend the measure for 30 days after talks with the countries' leaders. New tariffs against China came into force, to which Beijing responded with counter-tariffs. Trump has also threatened to impose tariffs on the EU "pretty soon." Commentators discuss how Europe should react to a looming trade war with the US.
Credibility gone
Trump and the US itself will lose out in the end, Svenska Dagbladet is convinced:
“The big loss for America is not economic in nature. Blanket tariffs on neighbours and allies in complete violation of agreements and absurd claims on other countries' territories show that the US under Trump cannot be trusted. What was promised yesterday may change tomorrow. On Monday afternoon it turned out that the tariffs were perhaps 'only' a threat, as they have been on other occasions. Suddenly it was announced that Trump had postponed the tariffs against Mexico for a month. But the damage to trust has already been done.”
Okay, then without the US
The EU must adhere to the principle of free trade now more than ever, Politiken stresses:
“Free trade is the key to Denmark's prosperity and a cornerstone of the EU. Without US participation it will become more difficult, but for now the task at hand is to build alternative structures. The EU recently concluded a historic comprehensive trade agreement with the Mercosur countries in South America. Let's see more of that. Trump's rule-breaking and tariff wars must elicit retaliatory measures, nevertheless global free trade must be maintained as far as possible. Even without the US.”
Immediately, loudly and publicly
Spiegel columnist Michael Sauga believes the EU is ill-prepared:
“Its companies are dependent on exports to the US and its armed forces are weak. This is a poor starting position from which to extract anything in negotiations with Trump. ... In the end, the EU states must hope that the Americans themselves will recognise the absurdity of Trump's trade policy. ... There are reports that the US tech billionaires are aware of the danger posed by Trump's economic gamble. ... They could prove that their embarrassing sucking up to the strong man in Washington in recent weeks has at least been good for something. They must warn Trump: immediately, loudly and publicly.”
Good war better than a bad agreement
Europeans must seek global allies to prepare for a trade war, the business newspaper Les Echos urges:
“Europe must react quickly and vigorously to this threat and above all help to form a group of defenders of free trade alongside Canada, Mexico and even China. An axis of good that rejects protectionist dictates. Trade wars produce nothing but losers, but simply caving in to Trump, who will make further irrational demands, is not an option. If we try to avoid war by reaching a bad agreement, we'll end up with a bad deal plus a war. Let's join forces to say that in this particular case a good war is better than a bad peace.”
Cautious approach called for
Ireland would be particularly hard hit by a trade war between the EU and the US, warns the Irish Independent:
“Any trade war could have many victims on all sides, and the EU is in Mr Trump's sights. He said at the weekend that tariffs on imports from the bloc are imminent. ... American tariffs would be disastrous for Ireland. Behind Germany and Italy, we have the EU's third-biggest trade surplus with the US, much of this in pharmaceuticals. ... EU leaders will be hoping for a swift climbdown, that the spread of the trade war can at least be contained. So soon after Covid, the war in Ukraine and the soaring cost of living, Ireland can ill afford another economic shock. Taoiseach Micheál Martin was right yesterday to warn the bloc against making any premature moves.”
Not so bad provided Trump secures peace
The negative effects of the tariff decision could be offset by Trump's political successes, writes the pro-government media outlet Mandiner:
“Trump's decisions, however painful they may be for other countries, are understandable, and the potential negative effects on Hungary can be amply compensated for if the US president's other big plan succeeds: securing peace in Ukraine. If that were achieved, any temporary negative economic impact on our country would fade away.”
EU next in line
Trump's economic policy is completely erratic, criticises Der Standard:
“The tariffs render the current North American free trade agreement, which Trump himself negotiated during his first term in office, obsolete. And they damage one of the most closely interlinked economic areas in the world. Trump is not making any concrete demands of Mexico and Canada that would enable them to avert the painful tariffs. ... It is equally unclear why China, whose trade policy is much more problematic, is only being charged ten percent and is thus reacting tentatively. But Trump's hatred is directed more against friendly democracies than authoritarian opponents. This will also be felt by the EU states, which are sure to be next in line.”
Trade War 2
As in Trump's first term, Europe will not be spared from US tariffs, fears Večernji list:
“The US president has threatened the EU with a trade war in recent months and said that if the EU doesn't buy more US oil and gas there would be 'tariffs all the way'. ... We know what this could look like from his first term in office. Back then he imposed tariffs of 25 percent on steel and ten percent on aluminium imports from the EU, Canada and Mexico. This led to a trade war with the EU, which countered with tariffs on US products such as whisky, motorbikes and jeans worth around six billion dollars. The European Commission has announced that it is prepared to take countermeasures again if Trump introduces tariffs again.”
Not without risk for the president
US consumers will pay the price for this, the Süddeutsche Zeitung believes:
“Prices in the US are likely to rise because importers will pass on the import fees. ... The president has already prepared his fellow Americans for this. His economic advisors apparently believe that the higher prices will only be temporary. If they're wrong, Trump will have made his first big mistake. He promised voters that he would bring down prices, and many Americans voted for him for precisely that reason. If inflation picks up again, they will blame him. Regardless of how many billions he claims his tariffs have raised or how many industrial jobs they've created.”
Testing how far he can go
Trump is testing the limits, Corriere della Sera fears:
“Unfortunately, we must also consider another, even more radical hypothesis. It has to do with the brutality of the first days of his government, including the tariffs that were imposed in a way that seems to belie his dealmaker logic. ... This suggests that Trump, having long studied how to eliminate the obstacles that held him back in his first term, is now imposing paradigm shifts on all fronts to assert the absolute power of the executive branch. ... He is doing this by ignoring the laws of Congress (and in some cases the Constitution), using emergency powers out of hand and testing the waters to see how far he can go - at home and abroad - without encountering much resistance.”
A reissue of the Monroe Doctrine
The tariffs have little to do with economics or trade, La Repubblica objects:
“The stated aim is political: to seal up US borders against illegal immigration, to eliminate the drug cartels, to control China's incursion into Washington's back yard. Either Mexico and Canada cooperate or they will have to bear the costs of US tariffs. This confirms an important feature of Trump II's foreign policy: the White House is reaffirming its own sphere of influence in the Western Hemisphere. Trump, by drawing on the decisions of the late 19th century, is in fact applying a kind of updated [isolationist] Monroe Doctrine . ... According to that doctrine, America needs not allies but obedient countries as neighbours.”
Turning bloc logic on its head
Trump is disrupting both globalisation and bloc thinking in international relations, writes sociologist Pedro Gomes Sanches in Expresso:
“A global world that is more profitable for everyone is giving way to a half-world of blocs that is less profitable for some. The underlying assumption is that the democracies, or 'the West' if you prefer, acts as a bloc: with customs sanctions against the 'other' bloc (there are plenty of reasons for this, from social to labour to environmental dumping), but no tariffs within it. However Trump has turned this thesis on its head: with his disdain for old allies and the threat of tariffs for us Europeans too.”