January 31, 2020
America and Europe will lose to China in transatlantic trade war
A transatlantic trade war is looming. After finally concluding a phase one trade agreement with China, President Trump is now turning his sights to Europe and is doubling down on his threat to levy more tariffs. While there was positive talk from both the United States and the European Union at the World Economic Forum, there are major obstacles to any agreement given the trade threats by Trump and all his demands for striking a deal. These threats aim to decrease the trade deficit with Europe, shape policy on Iran, and negotiate a better deal. Trump has claimed that great power competition with China is his top priority. However, effectively competing against China will require help from European allies. If the United States escalates a trade war with Europe, only China will come out as a winner.
The current trade policy with Europe has been turbulent from the start. Since 2018, tariffs have been imposed on European steel and aluminum. Last spring, Trump also called for tariffs on European autos, a threat he has renewed to pressure European allies to initiate a dispute mechanism in the Iran nuclear deal. When France imposed a technology services tax, the administration threatened tariffs on over $2 billion worth of French exports. Trump even asserted that Europe is worse than China on trade issues. Uncertainty about his tariff threats only increases the chances of an intensified ongoing trade war between the United States and Europe.
Read the full article in The Hill.
More from CNAS
-
The U.S. or China? Europe Needs to Pick a Side
Commentary
Amid ten consecutive weeks of protest in Hong Kong, Beijing is looking to a seemingly unlikely place for support: Europe. In recent days, Chinese ambassadors across the contin...
By Andrea Kendall-Taylor & Rachel Rizzo
-
Tangled Threats
Reports
Executive Summary China and North Korea pose intertwined challenges for U.S. and allied policy. The Korean Peninsula constitutes just one area among many in U.S.-China relatio...
By Jacob Stokes
-
The Biden administration just stalled China’s advance in the Indo-Pacific
Commentary
Australia, by intensifying the military competition with China, could tee up a chain of as yet unforeseen events....
By Robert D. Kaplan
-
China tariff policies flounder without a strategy
Commentary
The White House ought to be asking a series of questions. What problem are we responding to? What are we trying to achieve? How will 301s and tariffs further that?...
By Van Jackson
