Xinhua recently published an analysis article discussing the intensified tough relationship between the European Union and the United States. As soon as U.S. President Trump announced the U.S. hike in the tariffs on steel and aluminum, the EU immediately described its counter measure to increase its tariffs on U.S. products such as Jeans and Harley-Davidson Motorcycles. However, Trump responded with threats against EU automobiles. The EU then promised to hold a “firm position” on defending EU interests. The French President even confirmed the position to take the fight to the WTO. Germany, the nation having the largest surplus with the U.S. in the EU, stated that “protectionism is the wrong path.” However, the U.S. is the EU’s largest trade partner. Just for the automobile and parts industry, the EU has a near US$40 billion trade surplus. The EU may not want to engage in an actual trade war against the U.S. or at least hopes to contain the conflict to a manageable level. Chinese analysts expressed their belief that Germany may not agree with the EU Council on increasing tariffs. The EU should also worry that its counter measures may end up pushing the U.S. to leave the WTO – if Trump actually delivers on his campaign promises. This may cause a global chain reaction leading to greater chaos. At the moment, with the EU-US strategic alliance relationship still in place, trade conflicts could be the new norm between the two in the years to come.
Source: Xinhua, March 8, 2018