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            Highlights & Notes

            RE: How the EU succumbed to Trump’s tariff steamroller

            www.ft.com

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            “liberation day” tariffs that the US president had inflicted on most of the world earlier that month had sent financial markets into a tailspin as investors dumped US assets over recession fears. With the sell-off intensifying, Trump blinked and on April 9 dropped the tariffs to 10 per cent, in what he said was a temporary measure.

            Rather than join Canada and China with instant retaliation, the EU — hamstrung by divergent views among its member states — chose to seek a compromise in the hope of securing a better deal.

            “He’s the bully in the schoolyard and we didn’t join others in standing up to him,” said one diplomat. “Those who don’t hang together get hanged separately.”

            “With the benefit of hindsight, the EU would have been better off answering the US vigorously in April in a one-two combo with China’s retaliation against the US tariff hikes, which left markets and Trump reeling,” said Riekeles, now at the European Policy Centre think-tank.

            Germany, France and a few others pushed for the commission to consult on using its new “trade bazooka”, the anti-coercion instrument. Designed after Trump’s first term to counter trade policy being used to pressure governments over other matters, it would allow Brussels to bar US companies from public tenders, revoke intellectual property protection and restrict imports and exports.

            Maroš Šefčovič, the EU’s avuncular trade commissioner, was dispatched to Washington seven times to propose areas of agreement, deliver homilies on the importance of the transatlantic relationship and promote Germany’s car offset scheme. In total, Šefčovič held more than 100 hours of frustrating talks with his US counterparts.

            There is no hiding the fact the EU was rolled over by the Trump juggernaut, said one ambassador. “Trump worked out exactly where our pain threshold is.”

            Mario V.

            Co-Founder & CEO @ Readocracy

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