The EU can play it cool with Trump's trade threats | Today news

London: Other governments have so far taken three main approaches to dealing with Donald Trump’s trade threats. China returned hard to the US president’s rates and partially put him back. Canada also has retaliation again and avoids some of the pain Trump sustained on other countries. Meanwhile, Britain has entered into a fast agreement that benefited the United States. None of these is a model for the European Union. The 27 -member group is not China. Although its bilateral goods trade, the new tab of the United States last year, was worth 70% more than between the US and the People’s Republic, the EU does not open an autocracy that Trump can surpass. If it anticipates the US president, he can come up with the game by pulling the mat under Ukraine and undermining the EU’s defense. American hard power gives what geopolitical strategists call “escalation domination”. The EU is also not Canada. Ottawa could hang tough because his people were upset that Trump tried to ward off Canada to become part of the United States. While the anti-Trump sentiment is high, the new tab opens in the EU, politicians who are sympathetic with him, such as the new president of Poland, can still be elected. On the other hand, the EU is not the UK. Both run the risk of Russia’s invasion of Ukraine. But the EU is trading seven times more goods with the United States than Britain, opening a new tab – which is why Washington has more to lose than economic relations break. There is another way for the EU to deal with Trump’s threats: Play it cool. It is more or less what the block does. This means that it does not escalate the conflict or accept a bad agreement. It means being open to a good deal if the US lowers its demands, but is willing to play the long play if it is not. One reason to buy time is to help Kyiv. The longer the EU has to prepare its own support package for Ukraine, which includes it to get a lot of cash, the less the damage is if Trump eventually cuts off all US aid to the country. The president’s own vulnerabilities may also increase over time. Just look at the spectacular end of his alliance with Tesla, open new tabboss Elon Musk. The fragile employment wandering with China can break down, causing more financial turmoil, which makes Trump less eager to choose a fight with the EU. If the Supreme Court stops him from using emergency forces to set up rates, his negotiating position will be weaker. And rates could do more damage to the US if its suspected victims are pushing up inflation and the growth of the shrinkage. A quick deal? Trump has a zig-zigging in his trade threats and actions against the EU. The current state of play is that there are 50% rates on US steel imports and aluminum from the block, a 25% tariff on cars and 10% so -called reciprocal rates on most other goods. The US president has threatened to increase these reciprocal rates to 50% if there is no agreement by July 9. He also looks at more “sectoral rates”, also on pharmaceutical products and semiconductors. While the EU complained to the World Trade Organization (WTO), it delayed its own retaliation. The negotiators accept that it is unlikely to reverse the reciprocal rates, the Financial Times, have opened the new tab. The block is still aimed at avoiding the sectoral. Those on cars and any pharmaceutical products will do the most damage. This hung the possibility of buying more US equipment and natural gas to get an agreement. An agreement on these lines may be good for the EU. It must increase its defense and eliminate the purchases of Russian gas. Although it is best to have its own arms and energy supplies, it is an interim measure to buy more from the US. However, an important nuance is that the EU should retain the right to act by the reciprocal rates after the WTO issues its verdict, says Ignacio Garcia Bercero, a new tab, a former senior EU trading officer. Such a treaty would involve Trump quite a climb. Indeed, weapon and gas purchases will limit the US goods shortage with the EU, which was $ 236 billion, a new tab last year. But his administration has a number of other complaints, including the standards for added tax and food safety of the block, as well as the digital tax that some of its members impose on technical giants. It’s hard to see the block matching something in those areas, says Simon Evenett, professor of geopolitics and strategy at IMD. Back to war? Although the US side described the EU trade talks as ‘very constructive, publicly TAB’, discussions can easily break down. The question then is how the block would react if Trump imposed higher reciprocal rates. The EU has so far not given countermeasures. Although he agreed to tax 21 billion euros of US imports in response to the steel and aluminum tariffs, it delayed until July 14 to try to get an agreement. The European Commission, its executive arm, also consults on the tax of a further 95 billion euros of US imports in response to the car tariffs and the reciprocal. But added, these tit-for-TAT measures would be equal to only a third of the 379 billion euro’s EU import subject to Trump’s rates. Some analysts, open new tabs, think the block should be harder. One idea is to open a new tab with the EU in 2023 US services, where the US had a 109 billion euros. Another one is to activate its’ anti-wranged instrument, a new tab, which enables retaliation against US businesses working in the block. Another one is to threaten to ban the export of critical goods, such as the lithographic equipment needed to make semiconductors. Extreme events may need extreme answers. But for the time being, the EU should keep it cool. It should not be itself that it is stronger or more united than it is. It should remember that Trump can become weaker over time. And it should never forget Ukraine.