"We Won't Talk With A Gun Pointed To Our Head": Europe Braces For Trade War With The US

With just days left until the May 1 deadline when a temporary trade waiver expires and the US steel and aluminum tariffs kick in, and after last-ditch attempts first by Emmanuel Macron and then Angela Merkel to win exemptions for Europe fell on deaf ears, the European Union is warning about the costs of an imminent trade war with the US while bracing for one to erupt in just three days after the White House signaled it will reject the bloc’s demand for an unconditional waiver from metals-import tariffs.

"A trade war is a losing game for everybody,” Belgian Finance Minister Johan Van Overtveldt told reporters in Sofia where Europe's finance ministers have gathered. “We should stay cool when we’re thinking about reactions but the basic point is that nobody wins in a trade war so we try to avoid it at all costs."

Well, Trump disagrees which is why his administration has given Europe, Canada and other allies an option: accept quotas in exchange for an exemption from the steel and aluminum tariffs that kick on Tuesday, when the temporary waiver expires. "We are asking of everyone: quotas if not tariffs,” Commerce Secretary Wilbur Ross said on Friday.

This, as Bloomberg points out, puts the EU in the difficult position of either succumbing to U.S. demands that could breach international commerce rules, or face punitive tariffs.

Forcing governments to limit shipments of goods violates World Trade Organization rules, which prohibit so-called voluntary export restraints. The demand is also contrary to the entire trade philosophy of the 28-nation bloc, which is founded on the principle of the free movement of goods.

Adding to the confusion, while WTO rules foresee the possibility of countries taking emergency “safeguard” measures involving import quotas for specific goods, such steps are rare, must be temporary and can be legally challenged. The EU is demanding a permanent, unconditional waiver from the U.S. tariffs.

Meanwhile, amid the impotent EU bluster, so far only South Korea has been formally spared from the duties, after reaching a deal last month to revise its bilateral free-trade agreement with the U.S.

Europe, on the other hand, refuses to reach a compromise, and according to a EU official, "Trump’s demands to curb steel and aluminum exports to 90 percent of the level of the previous two years are unacceptable." The question then is whether Europe's retaliatory move would be painful enough to deter Trump and lift the sanctions: the official said the EU’s response would depend on the level of the quotas after which the punitive tariffs would kick in; meanwhile the European Commission continues to "stress the bloc’s consistent call for an unconditional, permanent exclusion from the American metal levies."

“In the short run it might help them solve their trade balance but in the long run it will worsen trade conditions,” Bulgarian Finance Minister Vladislav Goranov said in Sofia. “The tools they’re using to make America great again might result in certain mistakes because free world trade has proven to be the best solution for the development of the world so far.”

Around the time of his meeting, French President Emmanuel Macron made it clear that the EU is not afraid of an escalating trade war and will not be intimidated, saying "we won’t talk about anything while there’s a gun pointed at our head."

He may change his opinion once Trump fires the first bullet.

Adding to Europe's disappointment, during her visit to the White House on Friday, Angela Merkel said she discussed trade disputes with Trump and that she failed to win a public commitment to halt the tariffs.

Meanwhile, Merkel's new bffs over in France are also hunkering down in preparation for a lengthy conflict. French economy minister Bruone Le Maire told his fellow European bureaucrats Sofia during a discussion on taxation: "One thing I learned from my week in the U.S. with President Macron: The Americans will only respect a show of strength."

Coming from the French, that observation is as accurate as it is delightfully ironic.

And now the real question is who has the most to lose from the imminent Transatlantic trade war, and will surrender first.

 

 

Comments

cheka Sat, 04/28/2018 - 18:37 Permalink

free trade open border globalists fighting to destroy all western countries

the awakening (to their scam) has begun.  throw off the propaganda they've pelted us with for many decades

unless you want people like killary, obomba, feinstein, pelosi running things

Oliver Jones beepbop Sun, 04/29/2018 - 02:45 Permalink

It's simple: Immediately drop sanctions on Russia, and announce a new partnership and trading agreement with both Russia and China. Pledge support for Assad, and put trade sanctions on any country that drops bombs, fires bullets (or sponsors anyone else who does so) in the Middle East.

Turnabout is fair play: If Trump needs to see a "downside" to no deal, make sure he sees one.

In reply to by beepbop

Hugh_Jorgan I Feel a littl… Thu, 05/03/2018 - 12:57 Permalink

I wasn't commenting on the state of anyone's military was I? But yes, the social experiments in the US military has turned things into a hot mess, nothing new tho.

I was commenting on the lack of testicles on the part of ALL OF THE EU. (the older generation in UK showed some balls but their government is still too plugged-in to the EU)

Let's see if you can guess whose military is full of clowns that are constantly drunk-on the job?

In reply to by I Feel a littl…

Fireman who-be-u-be Sun, 04/29/2018 - 04:53 Permalink

Jim Bim piss Jack Daniels hog water, Davy Harley "cycles" and assorted shiny new "smart" missiles that don't work...what is it exactly that Shitzville USSA has to "trade" apart from the evil pedovore filth, Hollyweird contagion and chosenite bankster fraud and disease and death without end? Just curious as to why anyone would want anything from a cesspool?

In reply to by who-be-u-be

Endgame Napoleon Mr. Universe Sun, 04/29/2018 - 11:55 Permalink

Hilarious: WTO “rules” say you cannot limit exports, while countries with low-wage labor that soak of up most of the jobs in American-owned companies put on export-quotas-by-any-other-name via tariffs on goods from high-wage-countries-in-name-only, making it a lose / lose for all but a handful of wealthy US elites, taking advantage of the global system of rigged trade by employing mostly low-cost, offshored labor. 

European countries do not compete by means of cheap labor, though, nor do Japan & Canada. They may slap on tariffs. 

In reply to by Mr. Universe

silverer gatersaw Sat, 04/28/2018 - 22:28 Permalink

Every company I dealt with as a vendor in the US was ruined after it was bought out by a European company. They immediately raise prices 8,35, even 40% in less than two years. Twice I've had it happen. One of the companies I dealt with for years as an American managed company was bought and driven out of business within two years. European companies are high priced in the US because they need that extra money to send home to prop up their socialist governments. It usually doesn't work out well.

In reply to by gatersaw

Endgame Napoleon gatersaw Sun, 04/29/2018 - 12:03 Permalink

It is part of it, but in previous eras, the US did not ship over two million jobs and potential tax revenue overseas. These days, so-called free trade is not just about buying goods from other countries, but ceding most of the jobs created by innovation nurtured and spawned in the USA to workers in foreign dictatorships, just for a quick, cheap buck for a few. When compounded by cheap, wage-cutting, welfare-boosted immigrant labor here in the USA and automation, we now have mass underemployment of citizens, with the carnage spilling over into the historically over-full prisons and onto the streets.  

In reply to by gatersaw

swmnguy CashMcCall Sun, 04/29/2018 - 06:27 Permalink

The US economy is totally screwed because of Capitalism, not because mysterious foreign forces who were totally not us have screwed us up.

Our system has inherent flaws which have always been visible to those willing to look.  We installed regulations on finance, trade, and corporate practices to protect against those flaws.  When we removed those safeguards, what was predicted to happen, happened. 

And now we have no solutions, because all of Establishment America, both factions of the Corporate Finance War Party, have ruled out of bounds any attempts to address the nation's real problems.  Democrats are pursuing Identity Politics.  Republicans are selling Identity Politics to white males.  That panders to the people who want easy solutions to complex problems and want to point blame at somebody else rather than confront issues.

Unfortunately, it seems things haven't gotten bad enough yet.  All the partisans still prefer fingerpointing and mental masturbation to having to inconvenience their sponsors, who have accumulated so much of the wealth of the entire nation by manipulating the flaws in our system.

Once American workers are having to live on the same purchasing power as their Chinese and Mexican counterparts, about $5,000 in current valuations, then manufacturing jobs will return to the US, and maybe then people will be forced to confront reality.  But it might not be until then.

In reply to by CashMcCall

Scipio Africanuz cheka Sun, 04/29/2018 - 07:39 Permalink

The vast majority of Americans don't understand that this is truly bad for them. The exorbitant privilege of the USD, is major facilitated by Europe. Picking fights with adversaries is all well and good, adding "allies",  means America has a death wish.

Well, for those of you cheering, you'll soon get your wish and rue the day you made that wish.

Be careful what you ask for, you always get it...

In reply to by cheka

Endgame Napoleon Scipio Africanuz Sun, 04/29/2018 - 12:17 Permalink

I have always been for more protectionism, but I am not sure why Europe, Japan and Canada are included and suspect it may be to shift the focus from China and Mexico, where American high rollers like to invest due to the cheap labor.

That one guy’s explanation of how Europeans sometimes take over companies, jacking up prices to cover their socialistic projects back home, might explain something.

If so, it should be advantageous to American companies with lower prices and is the opposite of what happens when big-box stores buy Chinese-made products in bulk, driving prices on nonessential items down so much that small shops cannot keep their lights on if they try to compete based on price.

Small shop owners pay more for one component of a product than those behemoths pay for a whole box of finished goods.

Meanwhile, the $5 discount on imported jeans, or the $20 discount on clearance-rack jeans, does not make a hill-of-beans difference to most non-welfare-eligible Americans, when rent soaks up more than half of their earned-only income. 

Nothing about global trade relieves that situation; it just makes it worse due to the job loss.

 

In reply to by Scipio Africanuz

gwar5 cheka Sun, 04/29/2018 - 08:37 Permalink

Yep.

And there's not going to be any trade war because the cheese eating surrender monkeys already said they will avoid one, "At all costs."

If the USA has leverage over the EU Trump should present them his middle finger and use it. There will be no trade war because its leverage, not a bluff.

We will see if EU countries will break ranks to cut their own deals with Trump which will undermine the EU. Brilliant move by Trump.  

 

In reply to by cheka

Endgame Napoleon gwar5 Sun, 04/29/2018 - 12:22 Permalink

The biggest reason I would rather see Trump focus on keeping his promises on immigration is that, even if some manufacturing jobs returned to the USA, they would be filled by legal / illegal immigrants who can work cheaply due to layers of monthly welfare that covers their rent and groceries and refundable child tax credits (EITC) up to $6,431 for sex and reproduction. If something is not done to stop the massive, lawless flow of welfare-buttressed immigration, it just does not matter. Well, it would matter only in terms of the Social Security contributions that are offshored, right along with the jobs. 

In reply to by gwar5

falak pema cheka Sun, 04/29/2018 - 08:42 Permalink

every name on that roster is as American as a MacDonald hamburger.

With all the razmattaz of GMO and artificial industrial flavors and fragrances as toxic icing on that retail supply chain assembled piece of meat.

That's America and its now drowning dream !

Propaganda or Madison Avenue sales and advertising hype is an integral part of its DNA.

You wanna change dat?

You gotta find another way than just saying : we've become Stalinist and build our own form of Duck family closed border goulag-dictatorship.

We've been thaar!

In reply to by cheka

Theta_Burn Sat, 04/28/2018 - 18:37 Permalink

The fix needs to be methodical, over a period of time, just like the sell out was..

Unfortunately Trump thinks it can be done in a year.. 

That said, so far it's more than any President has accomplished in the last 40 yrs.

vato poco Bobbyrib Sat, 04/28/2018 - 19:38 Permalink

"we won't" do this; "we won't" do that; "we won't" do the other thing .... 

yeah, that's what China, and N Korea, and the myriad domestic enemies here in USA said too. hasn't worked out real well for 'em, has it. and it's only been 15 months!

you WILL, pierre. you WILL. just like pancho WILL pay for the Wall

In reply to by Bobbyrib