On June 26, European Commission President Jean-Claude Juncker met with President Trump at the White House to talk about trade. Afterwards, to the surprise of many (including me), they held a press conference at which they said positive things about the U.S.-EU trade relationship. Then later, President Trump had five positive tweets about the meeting. It was more amicable than anything we’ve seen in U.S. trade policy for many months.
But obviously, positive tweets only get you so far. What does all this mean in terms of substance? That’s hard to say at this point. The key items the parties agreed on were the following:
As for the existing tariffs the Trump administration has imposed on steel and aluminum from the EU, and the retaliatory tariffs imposed by the EU, those will stay in place, but progress on the broader talks could help resolve the tariff issue. Also, it appears that the threatened tariffs on auto imports will not be imposed on the EU.
In some ways, this seems like a “light” version of the Transatlantic Trade and Investment Partnership that the Obama administration had been trying to negotiate with the EU. But it’s too early to come up with a label. We need to see how this develops.
It would be nice if we knew why Trump changed his tone. Has he recognized the limits of his aggressive approach to trade policy? Does he fear the impact of a trade war on voters? Did he have a good personal rapport with Juncker?
This would help us understand whether a permanent change in approach is possible. Unfortunately, it’s not clear at this point where this is all going and how long it will last. But one day of trade peace is nice after months of harsh rhetoric and escalating tariffs.
Understand dynamic global markets.
Understand what’s occurred and more accurately assess what’s ahead. Improve your corporate strategic plan, seize the right opportunities, and boost competitiveness and profits.
Informative, analytical and policy-oriented perspectives.
Comprehend the impact of past events and fully grasp and prepare for the challenges ahead.