With European Commission President Jean-Claude Juncker set to meet face-to-face with President Trump today to discuss a EU-US trade deal, Trump has once again laid his uncomfortably clear cards on the table, cornering US' competitors into admitting that their current 'free' trade deals are anything but.
Reiterating his tweet from yesterday, Trump dug his heels in on his 'no tariffs' preference and blasted critics: "Every time I see a weak politician asking to stop Trade talks or the use of Tariffs to counter unfair Tariffs, I wonder, what can they be thinking? " Trump concludes ominously: "No weakness."
Every time I see a weak politician asking to stop Trade talks or the use of Tariffs to counter unfair Tariffs, I wonder, what can they be thinking? Are we just going to continue and let our farmers and country get ripped off? Lost $817 Billion on Trade last year. No weakness!— Donald J. Trump (@realDonaldTrump) July 25, 2018
Additionally, Trump confirmed - again reiterating his "be patient" calls from yesterday. Trump suggested that the U.S. would receive a better deal if representatives show unity on the issue. He went on to assure followers that negotiations are "going really well," adding that "the end result will be worth it."
When you have people snipping at your heels during a negotiation, it will only take longer to make a deal, and the deal will never be as good as it could have been with unity. Negotiations are going really well, be cool. The end result will be worth it!— Donald J. Trump (@realDonaldTrump) July 25, 2018
Finally, Trump took a swing at his biggest 'competitor', lambasting China for "targeting our farmers" and "ripping off our farmers" in an attempt to reposition their anger externally, rather than domestically, calling China's attempts to stop him as "vicious."
China is targeting our farmers, who they know I love & respect, as a way of getting me to continue allowing them to take advantage of the U.S. They are being vicious in what will be their failed attempt. We were being nice - until now! China made $517 Billion on us last year.— Donald J. Trump (@realDonaldTrump) July 25, 2018
As we noted previously, Trump made his view very clear yesterday:
"Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs... Remember, we are the “piggy bank” that’s being robbed..." and also "Countries that have treated us unfairly on trade for years are all coming to Washington to negotiate."
Juncker told reporters last week he is "upbeat and relaxed"; however, one doesn't need a crystal ball to know that things are likely not going to go well at the meeting, as Bloomberg reports that the European Commission President "won’t be coming to the White House with a 'great deal' on trade to counter Donald Trump’s recent criticism of the European Union and his claims it runs a $150b surplus with the U.S.," according to an unnamed European official.
The last time the two met face to face, at the recent G7 summit in Quebec, the EU’s most senior official told fellow European leaders that Trump had called him a "brutal killer" — though possibly in the spirit of jesting, over what Trump identified as unfair EU trade policies and fines on American tech companies.
Let's hope Juncker's "back pain" is better...
Last week Cecilia Malmstrom, the European Union trade commissioner who is accompanying Juncker on his trip, indicated he would attempt to persuade Trump against his threat of raising tariffs on European car imports, possibly wrecking a $1 trillion trade relationship which the EU says will be disastrous for both sides of the Atlantic, with 15 million jobs on the line.
Ahead of today's meeting a European Commission spokesperson said, "It is an opportunity to de-dramatize any potential tensions on trade and to engage into an open, constructive dialogue with our American partners" — however drama is what we fully expect, as when Trump initially announced tariffs in March, Juncker vowed EU retaliation by declaring "we can also do stupid".
Since June, US-European tensions have reached a boiling point after Trump continued imposing tariffs on steel and aluminum imports into the US. As Juncker himself again vowed in a speech last week, saying "We will continue to respond toe-to-toe to provocations," and "All efforts to divide Europeans are in vain" — the EU in response imposed retaliatory trade taxes in early summer on a number of the country’s most famous brands, including Levi jeans, Harley Davidson motorcycles, and bourbon whiskey. As we reported earlier, companies like Harley Davidson are already reeling as profitability will take a huge hit according to the company's latest forecast after being thrust into the middle of the trade war.
More recently, Trump has complained of currency manipulation , accusing "China, the European Union and others" of "manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge" in a tweet last Friday.
Finally, and most concerningly to Brussels (and Berlin), Trump has threatened to target the European automotive industry with even more tariffs, saying in a June tweet, that he would slap 20 percent tariffs on European car makers, insisting American manufacturers should "build them here" in accordance with this 'America First' doctrine.
Customs duties on imported cars considered by Trump would amount to an additional burden of around €5b for German companies “in the first round alone,” Eric Schweitzer, president of the DIHK association of German trade chambers, told Passauer Neue Presse.
Schweitzer said that he’s taking Trump’s threats "very seriously," and attaches "outstanding importance" to Wednesday’s trip of EU Commission President Jean-Claude Juncker to Washington for talks with Trump
Ironically the German reached the "same" conclusion as Trump: "accusing friendly partners of threatening national security is downright bizarre. Instead of new tariffs, we need fewer trade barriers."
Ok, well, in that case follow Trump's advice and drop all "tariffs, barriers and subsidies" What better way to have fewer trader barriers...