Happy summer, trade war is over? Jean-Claude Juncker returned from the White House having secured an accord to end Donald Trump’s tariffs and to avert a trade war between the US and the EU. (You can read the communique in full here.)
The two blocs have agreed to work together to eliminate tariff and non-tariff barriers to trade between them on all non-automobile related industry and to work to strengthen the World Trade Organisation. And the EU has agreed to increase its consumption of liquid natural gas – which the United States is currently a net exporter of – and soybeans immediately.
In reality, it’s a remarkable coup for Juncker. The EU is already seeking to buy more gas as part of the Commission’s long-term efforts to wean the continent off Russian energy. The EU already has zero tariffs on soy in place, and American soybeans are currently at a low price thanks to Trump’s trade war with China making them attractive to European farmers anyway.
Will it endure? Well, it’s Trump. The president was under growing pressure from senators in his own party, and the impetus to reach an accord with the EU so not as to simultaneously be at odds with both the EU and China were high.
One reason why Trump’s White House is so erratic is that the president’s mind changes depending on which advisor is currently in favour: those wanting to avoid a trade war are currently on the up, but that could change. And that Juncker has conceded very little that the EU hasn’t already conceded in practice may mean that Trump decides he’s been had and that the whole mess is re-opened in the not too distant future.
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