The Trump administration has developed an aggressive stance in trade policy around the world. It suddenly confronted its NAFTA partners Canada and Mexico with protectionist demands in a revised NAFTA and engaged in a trade war with China. It levied higher tariffs on steel and aluminium imports, even from allies such as Japan, Korea and the EU, which caused frictions with the EU because the national security rationale provided is clearly fake; as a result, the EU retaliated, the kind of tit-for-tat the Union had first hoped to prevent. President Trump has threatened to impose tariffs of up to 25 % on imports of cars and automotive parts from the EU, and the only possible reason would seem to be that European cars are successful in the US (and elsewhere), hence perceived (by Trump) as a burden for the bilateral trade balance favouring the EU. The EU is also suffering some collateral damage from the US /China trade war via global value chains and in terms of the uncertainty about the future of globalisation and of the WTO. The US and the EU have now decided to launch bilateral negotiations but these are likely to be ‘quick and dirty’ rather than the oversized and highly complex TTIP talks. The negotiation objectives of the two partners are not necessarily compatible though.
Do we in Europe really understand these new approaches in US trade policy? Do we fully grasp the motives and underlying thinking that drives the Trump administration in trade policy? Is Trump a new mercantilist, disrupting entrenched globalisation? Would the EU have to change its trade strategy as a result of the stance of the Trump adminsiration? In the new US President’s Trade Agenda (just published), it is stated that ‘the Trump administration inherited a signifcantly flawed trading system’. It continues that ‘recent events demonstrate that by using its leverage as the world’s largest market, the US can create better conditions for US workers and encourage more efficient global markets’. The Agenda also claims that, in 2018, the US created 264 000 new manufacturing jobs, the largest increase in 21 years and a critical point for Trump’s political position.
Dr. Craig VanGrasstek is eminently placed to illuminate the longer-run trends in US trade policy and the facts and intricacies of the current trade strategy of Washington DC. His newest book on ‘Trade and American leadership’ (Cambridge UP) and his decades-long experience in the field make him a much sought-after expert, also in the Brussels circuit.