The Dispute Between The United States And Europe How Is a Trade War Against Donald Trump? – 03/10/2019

Gérard Araud, former French ambassador to the United States, says in his memoirs that he had recommended President Emmanuel Macron not to respond angrily after the French clash with US President Donald Trump on November 11, 2018 in Paris. It's a boy, Araud argued about Trump, and a boy always wants to have the last word.

Europe has long discovered that the Trump boy may have outbursts of anger and untimely decisions and that it is better not to take him too seriously, such as when he threatened to make the United States leave NATO. But the Europeans are not going to stand idly by if Trump uses the tariff weapon against them and they intend to respond even knowing that a trade war does not benefit anyone.

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Europe is a military dwarf because it does not have for now the political will to put together its 28 national military forces. But it is an economic giant (its GDP is higher than the US) and especially the first commercial power of the planet. That is why, he understands, you can not step on and respond with reprisals to anyone who touches the tariffs, even if he is the spoiled child of the Oval Office.

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Washington announced Wednesday that it will use the WTO ruling that allows it to apply new tariffs to Europeans worth 7.5 billion dollars as compensation for illegal subsidies that four European countries – Germany, Spain, France and the United Kingdom – have given to Airbus construction company. Those four countries will be the most affected by the new tariffs.

US airlines will pay an extra 10% to buy Airbus planes, but the US consumer will pay up to 25% more for Scotch whiskey, Spanish Manchego cheese or French champagne. So to complete a list of 150 products.

Washington did not announce yet more tariffs on European cars. That would be the red line that would unleash European anger. The automaker is a key industry for Europeans in terms of developing new technologies, industrial production, trade surplus and employment.

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Brussels responded Thursday with the official speech prepared for days before the event that Washington announced new tariffs. A spokesman for the EU executive arm said the block "regrets that the US It seems to have made the decision to impose additional tariffs on European exports ”and that“ it is a step that, in the first place, will hit US consumers and companies and that will make the efforts to reach a negotiated agreement more complicated ”.

Europe has its reprisals designed, including the list of US products to which new or higher tariffs would be imposed. Now the decision is political. Brussels must decide whether to respond to the coup with another coup or, as Ambassador Araud recommended, he thinks twice because there is no instruction manual for dealing with a child.

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Or, in the words of the community spokesman: "We are going to look at all the possibilities, but that does not mean that they will be used at this time." Brussels thinks so long as additional US tariffs are not effective, while offering negotiations to Washington and while its Commerce services finalize the list of US products to which it would impose new or higher tariffs.

“Yes USA imposes countermeasures, it will be pushing the EU into a situation where we will have to do the same ”. The threat is on the table and some capitals push to make it effective. French Economy Minister Bruno Le Maire said Wednesday that he prefers "to reduce tensions and avoid tariff reprisals that will only harm our economies at the time that China strengthens its aviation industry." But he warned: "If (the US) chooses to impose sanctions, it will be an economic and political error and we will be prepared with our European partners to respond firmly."

Boomerang tariffs

Washington announced that the increase in tariffs will include 10% of Airbus aircraft, at the origin of the crisis. The other major global commercial aircraft manufacturer is the American Boeing, which, according to the Wall Street Journal, had asked the White House that this tariff be 100%.

Trump slows down and barely imposes 10% because American airlines, including giants like Delta or American Airlines, had warned that it would cause them great losses and because Boeing is in full restructuring after the accidents of its new 737 MAX model and is not in a position to compete with Airbus at full capacity.

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