“Europe will come tomorrow, and the next day, we have others who arrive,” said Donald Trump on Tuesday, July 23, after announcing the conclusion of an agreement with Japan on customs tasks.
Under pressure for several weeks and in a delicate economic situation due to persistent inflation (3% in 2024), Tokyo finally agreed to pay the customs tasks of 15% in most products, including cars, except steel and aluminum that will continue to be 50% punctuated.
The US president had threatened Japan, the main source of foreign investment in the United States and Washington dependent at the military level25%customs duties.
The terms of this agreement could serve as a framework for the discussion between Washington and Brussels, while discussions must be completed before August 1.
“The United Kingdom is an industrial dwarf (with crowned heads and golf courses that Trump appreciates). The EU looks more like Japan: the block will impuse greater customs duties, under the penalty of having to run the risk of snatching,” continues the economist.
Trump does not give up anything
A few weeks ago, Brussels hoped to get a deal More favorable than that found by the United Kingdom, with customs duties of 10% in most products. “I would not call this a commercial agreement at all,” the Swedish Minister of Commerce, who threatened Uncle Sam in mid -May, was in mid -May, who threatened the uncle of retaliation measures.
But the defense of European interests has not progressed since then. Worse, the American position has hardened and the EU does not seem to have managed to obtain great concessions.
In a brutal pressure blow, Donald Trump even threatened the union to take customs to 30% from August 1, when they only had 2.5% on average before their return to power. According to Goldman Sachs, this could cause a 1.2% drop in European GDP by the end of 2026 and, therefore, a very serious influence already fragile.
“The United States is looking for an asymmetric agreement,” has its own advantage, recalled Marc Ferracci on Tuesday, the Minister of Industry, pointing out the “deadly danger” that this could represent for certain French industrial sectors.
Suspended response
Europeans are now facing a complex option. “Will the EU prefer to be satisfied with a similar basic price of 15 % or prove its luck on August 1 and risk a climbing cycle?” Summarizes economist Brad Setser, specialist in International Trade in the Foring Relations Council, an American Research Center, in X.
Donald Trump has already assured that he would use customs barriers beyond 30% if the EU tried to defend himself.
For several weeks, France, however, has been pressing in this regard, especially demanding the use of “anti-coercion instrument”, created in 2023 by the EU precisely for this type of situation. Germany, who until now was partisan of a more attractive line with Trump, has now approached the Tricolor position according to the Financial Times.
However, the British newspaper points out “that a silent majority of the” Member States seem opposite to the outbreak of what is presented as a “commercial bazuca”.
These different positions are widely explained by the structure of the economy of different European countries.
France, in the process of advanced deindustrialization, shows a deficitive commercial balance with the United States (amount more than exports), unlike Germany, which gave a record record last year, and that the US market needs to guarantee the survival of its increasingly weakened industry.
List of American products that are probably lasted by countermeasures have been prepared. If an answer was decided, almost 100 billion euros in goods would be affected, especially in aeronautical, automotive and doctors. According to Bloomberg, they could be subject to a 30% tax if no agreement was reached.
A higher cost for Europe
Before the EU, China managed to influence the fury of the US president. For this, we significantly restricted rare earth exports, in which it has an almost monopoly. These raw materials are absolutely essential for the functioning of the US economy and even its military power. Beijing produced almost the entire samarium used in American missiles and combat planes reported an investigation by New York Times.
The EU probably does not have this type of pressure. And it is in a very different situation from China, which has been prepared for a long time to climb tensions with the United States and has made colossal efforts to reduce its dependencies.
Some observers still believe that Europe should answer. Olivier Blanchard asked “intelligent reprisals, even if they lead to dangerous economic and geopolitical situations in the short term.”
In this company, the former chief of IMF economists begged that the EU joined other countries such as “Japan, Canada, Brazil and anyone who wishes to participate” to bring the United States to a reasonable position. “
Whatever happens, the EU is likely to undergo a more important tribute than its American ally.
“Without reprisal, the cost of American protectionism is for the low United States, near European reprisals, this cost becomes significant for the United States, even if the damage remains double for the European Union,” said CEPII (Center for Prospective Studies and International Information) in a Note published in May Last, which provides for the effects of the EU economic response.
Source: BFM TV
