• About Us
  • Who Are We
  • Work With Us
Friday, March 5, 2021
No Result
View All Result
NEWSLETTER
The Globe Post
39 °f
New York
44 ° Fri
46 ° Sat
40 ° Sun
41 ° Mon
No Result
View All Result
The Globe Post
No Result
View All Result
Home Opinion

Trump Should Avoid Opening Second Front in Trade War

Jeff Kucik by Jeff Kucik
03/05/19
in Opinion
US President Donald Trump has launched a trade war against Europe and China

US President Donald Trump. Photo: Nicholas Kamm, AFP

Share on FacebookShare on Twitter

President Donald J. Trump recently threatened to slap a 25 percent tariff on European car imports, aiming to punish the E.U. for what Trump claims are “very tough” restrictions on U.S. goods. Trump’s threat is just the latest step backward in a U.S.-E.U. trade relationship that has been worsening for several years. The fear now is that Trump’s aggressive approach risks extending the trade war.

What’s at Issue?

There are three main areas of disagreement, starting with Trump’s controversial steel and aluminum tariffs.

Under Section 232 of U.S. trade law, the White House claims that metal imports are a threat to national security. In the summer of 2018, Trump raised duties on steel and aluminum by 25 and 10 percent, respectively. While the E.U. was temporarily exempt, tariffs were extended to Europe on June 1.

….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN

— Donald J. Trump (@realDonaldTrump) December 4, 2018

Europe has not sat idly by. It immediately filed a formal complaint at the World Trade Organization and, not content to wait for the legal process to unfold, the E.U. implemented retaliatory measures of its own. These measures targeted $4 billion worth of U.S. goods. Most famously, this included Harley Davidson motorcycles, which announced it would move production overseas to avoid increasing costs.

Second, there’s the debate over cars. Recent history shows that the automotive sector is uniquely important to U.S. trade policy. Greater access for Detroit automakers was a major sticking point in America’s negotiations with South Korea, and Trump heralded new car manufacturing rules as the primary victory won during NAFTA renegotiations.

Cars are equally important to the U.S.-E.U. trade relationship. The U.S. is the single largest importer of cars in the world, and the E.U. is the main supplier.

The trouble is the large imbalance in the relationship. In 2018, U.S. car imports from the E.U. outpaced exports 5 to 1. For Trump, this is a policy problem. Current U.S. tariffs on cars from the E.U. are 2.5 percent. But U.S. automakers face a 10 percent duty when shipping in the other direction. As a result, Trump wants Europe to open up to more American cars.

Third, the U.S. and E.U. have a longstanding disagreement over agricultural products. Sections of the E.U. market vehemently oppose what they perceive to be lax U.S. food standards. Certain animal feeds, GMOs, and pesticides are heavily regulated – or entirely prohibited – under E.U. regulations.

The E.U. argues that these standards protect the health and safety of their consumers. The U.S. argues that restrictions are thinly veiled trade discrimination and has previously requested that E.U. members significantly roll back agricultural regulations in any formal trade deal.

Can Disagreements be Resolved?

Cars dominate the headlines, but that disagreement might be the easiest to resolve. The E.U. already offered to eliminate car tariffs entirely last summer if the U.S. extended the same concession. Trump rejected this offer last fall, saying that it was “not good enough.” However, the E.U. has at least shown a willingness to bargain.

Securing concessions from the E.U. on agriculture may be much trickier. For one thing, both the U.S. and the E.U. are notoriously unwilling to liberalize agricultural trade. Both markets spend billions on farm subsidies and apply higher tariffs on food products, on average, than industrial goods.

Food safety issues are making matters more complex. During negotiations of the Transatlantic Trade and Investment Partnership – the agreement that would have joined the US and EU together in the world’s largest bilateral trade deal – E.U. officials were widely criticized for giving ground on regulations that protect food safety.

In face of public pressure, Europe’s leaders will have to decide how much ground to give this time around. There are good reasons for the E.U. to not back down, but it will mean a costly fight.

Quite apart from steel or cars or food, there is one additional reason we could be in for another round of tariff hikes: China.

Charts showing tariffs imposed by US and China against each other

If Trump secures anything close to a good deal, it will likely make him less willing to compromise with other trade partners. As Trump famously put it, he already believes that trade wars are “easy to win.” If Beijing grants meaningful concessions, it may fuel Trump’s conviction that aggressive unilateralism is the best way to advance America’s interests.

That would be the wrong lesson for Trump to learn from the U.S.-China trade war, which has already generated significant costs for the U.S. economy. He should avoid taking the fight across another ocean.

Disclaimer: The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of The Globe Post.
Share6Tweet
Jeff Kucik

Jeff Kucik

Assistant Professor, School of Government and Public Policy, University of Arizona

Related Posts

What President Biden Should Do About the Uyghur Genocide
Opinion

What President Biden Should Do About the Uyghur Genocide

by Omer Kanat
March 1, 2021
HRW released a statement on China's increasing prosecution of Muslim minorities in Xinjiang.
Democracy at Risk

China Targets Uighurs With More Prosecutions, Longer Prison Terms: HRW

by Staff Writer
February 24, 2021
Republican Senator from Missouri Josh Hawley
Opinion

Trump’s Acquittal and Republican Senators: Not Setting the Bar Low Enough

by Stephen J. Lyons
February 22, 2021
Rafael Grossi, head of the International Atomic Energy Agency.
World

Iran to Host UN Nuclear Watchdog Chief Ahead of Sanctions Deadline

by Staff Writer
February 20, 2021
Hong Kong pro-democracy activists demonstrate in support of veteran activists outside the West Kowloon Magistrates Court in Hong Kong.
Democracy at Risk

Veteran Hong Kong Activists on Trial Over Huge Democracy Rally

by Staff Writer
February 16, 2021
The sign of "Camp Justice" at the US Naval Station in Guantanamo Bay, Cuba, April 8, 2014.
National

Biden Wants to Close Prison at Guantanamo Bay: White House

by Staff Writer
February 13, 2021
Next Post
US President Donald Trump and China's President Xi Jinping in Beijing

Great Power Competition: The US-China Trade Dispute is About Much More Than Trade

Demonstrators take to the streets in Algeria to protest against a fifth term for President Abdelaziz Bouteflika

Algerian Students Say 'No' to Bouteflika Fifth Term

Recommended

Malika Boumendjel, widow of Algerian lawyer Ali Boumendjel, speaks in a 2001 interview about her husband's death during his detention by the French army.

Algeria Welcomes France’s Admission It Killed Independence Figure

March 4, 2021
Jake Angeli speaks to a US Capitol Police officer.

Attempted US Capitol Coup a Security and Existential Crisis

March 3, 2021
Myanmar police fire water cannon at protesters as they continue to demonstrate against the February 1 military coup.

Six Dead as Myanmar Security Forces Fire at Protesters

March 3, 2021
Saudi journalist Jamal Khashoggi was killed on October 2, 2018, while he was inside the Saudi consulate in Istanbul, Turkey.

Reporters Without Borders Sue Saudi Prince Over Khashoggi Murder

March 2, 2021
Hatice Cengiz delivers a speech addressing the US House of Representatives Foreign Affairs subcommittee on Capitol Hill, May 16, 2019.

Khashoggi Fiancée Demands Punishment for Saudi Prince

March 1, 2021
People lay flowers in central Moscow at the site where late opposition leader Boris Nemtsov was fatally shot, February 27, 2021.

Russians Mark Sixth Anniversary of Kremlin Critic’s Murder

February 27, 2021

Opinion

Jake Angeli speaks to a US Capitol Police officer.

Attempted US Capitol Coup a Security and Existential Crisis

March 3, 2021
What President Biden Should Do About the Uyghur Genocide

What President Biden Should Do About the Uyghur Genocide

March 1, 2021
Former US Secretary of State Mike Pompeo (L) meets with Sudanese Prime Minister Abdalla Hamdok in Khartoum, last August

Sudan’s Normalization With Israel Is a Win for Everyone

February 26, 2021
Stolpersteine in Greifswald, Germany.

I Can’t Mark Where My Grandfather Is Buried, but I Want to Mark Where He Lived

February 26, 2021
Republican Senator from Missouri Josh Hawley

Trump’s Acquittal and Republican Senators: Not Setting the Bar Low Enough

February 22, 2021
Why Not Equality for America’s Puerto Rican Men and Women?

Why Not Equality for America’s Puerto Rican Men and Women?

February 19, 2021
Facebook Twitter

Newsletter

Do you like our reporting?
SUBSCRIBE

About Us

The Globe Post

The Globe Post is part of Globe Post Media, a U.S. digital news organization that is publishing the world's best targeted news sites.

submit oped

© 2018 The Globe Post

No Result
View All Result
  • National
  • World
  • Business
  • Interviews
  • Lifestyle
  • Democracy at Risk
    • Media Freedom
  • Opinion
    • Editorials
    • Columns
    • Book Reviews
    • Stage
  • Submit Op-ed

© 2018 The Globe Post