The Trade Wars Have Begun: EU Brought a Knife to an All-Out Trade Gunfight With Trump
Meanwhile, Europe is stalling. They still hope to file a complaint with the World Trade Organization, claiming it will resolve the dispute. Russia tried complaining back in March. The US didn't give a damn. RIA Novosti has asked the Department of Commerce whether it's ready to negotiate with Russia and still hasn't received a response. Late May, Russia announced new reciprocal import tariffs on US goods. Europe doesn't seem to have realized that one shouldn't bring a knife to an American gunfight unless its interests are at stake. We believe they'll realize that soon.
Mikhail Antonov, chief of our European Bureau, with the details from Berlin.
Europe succumbed to fear and indignation after the US Minister of Commerce announced that Trump had endorsed the new tariffs. Fear because Europe felt cozy and safe under the American wing. Indignation because Washington attacked one of its own. "Why us?" The mixed feelings trigger exotic proposals to cancel the G7 meeting.
"The G7 summits are usually held to demonstrate the unity of the West. The cancellation of the summit in protest against Trump and the whole US government would be a symbolic and important message first of all, for the US president and those people who support his reckless policies".
The summit is supposed to be held in Canada, June 8-9. Why go there? To pour poison into each other's ears? French Minister of Finance Le Maire puts it bluntly: G6+1. The US against all.
Jean-Yves Le Drian, Foreign Minister of France: "Unfortunately, what we used to call "America first" is gradually turning into "America alone".
The US loneliness is relative. History knows the examples of isolation being brilliant if you dictate the rules of the game as the US does. It's more likely that Europe feels lonely and abandoned even though they put up airs in Brussels claiming the US will regret its decision.
Jean-Claude Juncker, President of the European Commission: "Whatever they do, we can do the same".
Peter Altmaier, Minister of Germany for Economic Affairs: "It would be painful for both of us. Those who support protectionism and unilateral measures have succeeded".
"Europe is preparing the re-balancing measures," says European Commissioner for Trade Malmström. The set of measures got a nickname "Moto-bourbon" because it increases the import duties for the US whiskey and motorcycles. It also includes orange juice, jeans, cigars, and peanut butter which is well familiar to Europeans thanks to movies from Hollywood.
France advocates for the harsh response. The media are sympathetic to Macron for everything he does that Merkel hesitates to do.
Emmanuel Macron, President of France: "I've never considered my voters to be idiots. Some might think that voters love the empty words. "I won." I'm changing the rules. We'll see how it goes. The states that launch trade wars tend to experience price increase and high unemployment".
The French President suggests that Trump considers his voters to be idiots. Nevertheless, it's an indisputable fact that Trump might be the first American President to fulfill his electoral promises regarding the economy. It's about national security, period. His consistency makes Merkel nervous. And she definitely hated Trump's recent Tweet.
"There will be great news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries you have waited long enough!"
What else can please the American Autoworkers if not the increase of import duties on European cars? In the US, Germany sells around 1,300,000 cars annually. It's an absolute leader in terms of export to the United States. The increase of the customs fees for steel and aluminum will cost Germany only 40 mln. euro. If the same happens to cars, Germany will lose about 5 bln. The protectionist spiral can take the US and Europe practically anywhere.
"A Junkie in the White House," Spiegel wrote about Trump this Friday claiming that he's got a craving for new duties. It will threaten the 30% of the German economy that focuses exclusively on export. After her recent visit to Washington, Merkel has no more illusions regarding Trump but she's still afraid of provoking him.
Angela Merkel, Federal Chancellor of Germany: "I don't want to rush things. We haven't come to a consensus yet".
The EU has a consensual set of mirror-measures, but Germany's approval is required to adopt it. They have 19 days to balance Merkel's semi-capitulationism with Macron's great ambitions of a battle captain. Both of the positions equally complicate the internal and the external agenda of the EU.
After the recent elections in Italy, the Eurosceptics are fighting to take advantage of the fruits of their victory. Let's not lie to ourselves.
"The number of our enemies has doubled. Americans to the right and Russians to the left. It's good that we, Germans, are used to this kind of situations. It's curious to see history repeat itself. When the sky gets overcast, the Italians quickly abandon the ship".
Sometimes, abandoning the ship is the wisest decision. At some point, the whole of Europe might have the same issue: Whose ship should they board after they abandon the current one? For now, Europe hopes to wait out until Trump's term is over and welcome the good old America. They refuse to believe that Trump is a historic stage, not an individual phenomenon. The situation reminds of domestic violence: "Yeah, he beats us, but he'll come to reason sooner or later if he doesn't kill everyone by that time".
Mikhail Antonov, Alexander Korostelyov, and Andrey Putra Vesti: News of the Week, Germany.