I have argued repeatedly that talk of a trade war is vastly overblown. It seems obvious that President Trump has properly staked out positions in defense of American interests with several trading partners, including the European Union, Mexico and China. His purpose is not to ignite a trade war, if such can be avoided, but rather to negotiate fairer and more favorable terms.
That view was vindicated today, as to the EU, by a joint White House appearance between President Trump and European Union Commission President Jean-Claude Juncker in which they announced an agreement that will obviate threatened tariff impositions on both sides:
Juncker says after a lengthy meeting with Trump that the EU has decided to increase imports of American soybeans and liquefied natural gas.
He says, “it will be done.”
He also says as long as negotiations are ongoing, “We will hold off further tariffs” and reassess existing tariffs on steel and aluminum.
Trump added that the parties have agreed to work toward zero tariffs–a goal Trump has been pushing–on non-automobile goods.
The announced opening of Europe’s soybean market to American farmers follows years of agricultural protectionism by the EU. This was masked as a concern about GMO crops; virtually all American soybeans are genetically modified to make them tolerant of the herbicide glyphosate. Increased purchases of American natural gas will reduce Europe’s dependence on Russian gas, thereby dealing another blow to Vladimir Putin’s regime.
The link above goes to a series of Associated Press stories about trade and today’s meeting that appeared through the day, beginning at 1:24 this morning. What’s funny is that the earlier stories, all brief, are generally anti-Trump on trade. The AP issued this one at 2:10 this afternoon, while the Trump-Juncker meeting was going on:
The head of the World Trade Organization is appealing to countries to speak out in favor of free trade and is warning about the vast negative consequences of a possible trade war after Trump administration tariffs imposed on key U.S. trading partners.
WTO Director-General Roberto Azevedo said he refused — as a policy — to point fingers, but alluded to “this dynamic of trade restriction” that could damage the world economy if it endures.
He told reporters in Geneva, “We are calling everyone who believes that trade is a force for good to speak up.” Silence, he says, is “as damaging as any action that leads to a trade war.”
He also warned about the “worst-case scenario” of a world without rules on trade, saying Wednesday that “the law of the jungle” would have devastating consequences for growth and jobs.
He said investors “are going to pull back, the economy is going to lose steam and over time jobs will be lost — millions of jobs will be lost.”
Just over two hours later, the AP was forced to eat crow as the US-EU agreement was announced in the Rose Garden. Do you suppose the AP will ever admit that Trump was right all along?
Published at Wed, 25 Jul 2018 21:24:35 +0000