How the EU succumbed to Trump’s tariff steamroller

4 comments

1. Rather than join Canada and China with instant retaliation and inflict pain on US consumers and businesses, the EU — hamstrung by divergent views among its member states — chose to take the pain in the hope of securing a better deal.

   Under the framework deal struck by European Commission president Ursula von der Leyen and Trump at his Turnberry golf resort on Sunday, the EU has swallowed a broad-based “baseline” US tariff of 15 per cent, including crucially for cars, but not for steel, which will be subject to a quota system.

   When the UK struck a trade deal with Washington in May, accepting Trump’s 10 per cent baseline tariff, it encouraged those EU member states seeking a settlement, especially Berlin.

   Officials will try to present it as a status quo deal, since the 15 per cent theoretically includes the pre-existing average US tariff of 4.8 per cent. In fact, on a trade weighted basis, the pre-existing US tariff on imports from the EU was only 1.6 per cent.

   There is no hiding the fact the EU was rolled over by the Trump juggernaut, said one ambassador. “Trump worked out exactly where our pain threshold is.”

2. Interesting that media is selling this as a big trump victory. 15% seems pretty middle of road relative to other countries and it’s just going to get passed on to US consumers anyway

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4. Can’t believe Europe did this to save American consumers from paying the extra 15% in tariffs.

   On a more serious note, I hope the next administration will work on reducing tariffs for all but China and some loudmouth countries like Brazil. The US does by and large prop up the economies of like minded countries, technically or practically, it can and it should as it’s in US’ interest that such countries are economically well. Imagine if the economic investments that went into China went into southeast Asia, south America, and Africa, getting cheap goods without the high prices the CCP wishes to impose.

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