The global trade war threatened by President Donald Trump has been averted – for now.
After crisis talks with European Commission president Jean-Claude Juncker, Trump tweeted yesterday about a “very big day for free and fair trade”.
According to his surrogates, the aim all along has been to bring other countries to the negotiating table, using hyperbolic rhetoric to scare them into rethinking the status quo. His Juncker, meeting, and the EUs agreement to import more natural gas and agricultural products from the US, is therefore being portrayed as a victory by his team, evidence that the controversial tactics of this deal-making President have paid off.
Read more: European car makers gain after Trump's EU 'trade deal'
However, this is wishful thinking in the extreme.
Of course, any bids to relax barriers and increase trade, on either side, are in the overall interests of US and EU consumers. But in terms of protecting American workers, the concessions are pitiful, and in no way undo the damage that Trump has already done.
Take soybeans, hailed as a headline victory for the US. “The EU is going to start to buy a lot more soybeans,” Trump proudly declared.
What he failed to mention (aside from the fact that the official text includes no formal commitments from the EU) is that this is unlikely to make a dent in Americas lost trade with its largest soybean market: China.
At the start of this month, China retaliated against Trump by imposing its own 25 per cent tariffs on key US products, primarily made in the Midwest states most loyal to the President. Farmers have since been lobbying the government for assistance. It is unlikely that a slight increase in exports to the EU will do much to appease them – or reassure the US manufacturers and car makers set to suffer from reduced trade with China.
And even if China wasnt a far bigger trade headache for Trump than the EU, the meeting achieved little concrete for the US. In return for soybeans, Trump agreed to halt further tariffs while negotiations were ongoing, losing key leverage. It is no wonder that Juncker called this a “major concession”. Seen in purely deal-making terms, the EU won far more than the US did.
Like the summit with North Korea, this meeting has been all noise and no substance from the US side, a chance for Trump to bask in the spotlight without achieving any real results.
At best, it was about hitting reset rather than progress. And while the world can breathe a sigh of relief that he has taken a step back from the brink of a trade war, as one Washington economics analyst put it, “the avoidance of disaster is not a success”.
Read more: Corbyn and Trump are two sides of the same protectionist coin
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