The only defense I have heard of President Trump’s tariff order is that it is an opening gambit for bargaining, and a more sensible position will emerge over time. We can only hope that is true, although I would have wished, in any event, that Trump would lay out an opening position that is coherent and defensible, and not based on misrepresentation of other countries’ tariffs.
Yesterday, European Union President Ursula von der Leyen, along with the Prime Minister of Norway, issued a statement that included a response to Trump’s tariff announcement:
We also discussed the effects of US tariffs. These tariffs come first and foremost at immense costs for US consumers and businesses. But at the same time, they have a massive impact on the global economy. Developing countries are hit especially hard. This is a major turning point for the United States. Nonetheless, we stand ready to negotiate with the US. Indeed, we have offered zero-for-zero tariffs for industrial goods as we have successfully done with many other trading partners. Because Europe is always ready for a good deal. So we keep it on the table.
If what Trump wants is fair trade, rather than autarky, that proposal should be acceptable, assuming it is genuine. But von der Leyen offered a stick a well as a carrot:
But we are also prepared to respond through countermeasures and defend our interests. And in addition, we will also protect ourselves against indirect effects through trade diversion. For this purpose, we will set up an ‘Import Surveillance Task Force’.
If the U.S. shuts out international trade, the U.K. has options:
We are discussing the response to the US but also the other two pillars of our strategy: the one is strengthening our Single Market [i.e., the EU], so getting rid of remaining barriers. The other pillar is diversifying our trade relations.
Further diversifying our trade relations is very critical for us, because this broadens the market opportunities and it is crucial for our companies. So we will focus like a laser beam on the 83% of global trade that is beyond the US – so, vast opportunities. This is why we are deepening our relations with our trading partners: You know the deals we have done with Mercosur, Mexico, Switzerland, and we are working with India, Thailand, Malaysia, Indonesia and many others.
You don’t need to be a globalist to think that the U.S. shouldn’t be an island, missing out on the benefits of international trade.
