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Like Donald Trump, the EU boasts its possession of the art of the deal. The trademark event in Brussels is a summit that ends at three in the morning, with tired negotiators coming up with a new complex agreement.
The EU way to make deals is almost the opposite of the White House style. The US president is impulsive, fast, makes extreme demands and is ready to disrupt all the rules. Europeans are legalists, methodologies and constantly in search of compromises and trade.
Trump’s style is more on and makes better titles. EUs are deadly dull but much more effective.
The question of which type of agreement-the Brussels or mar-a-lago mayhem-dysfunction is more than a matter of pride. The future of the world economy may depend on it. Both the EU and the US are currently trying to come with new trade agreements. They also urgently have to solve their differences before the beginning of July, when Trump’s 90-day pause for his “reciprocal” tariffs with the EU is planned to end.
The trade relationship of the EU-BA in goods is significantly greater than the influx between US and China. And transatlantic trade in services is also much more intense.
America’s fees for EU goods are currently 10 percent. But they are decided to grow to 20 percent in July. The EU is also hit hard by US 25 percent tariffs in cars, steel and aluminum, with the threat of further pharmaceutical fees.
With so much discussion, the European Commission is doing its best to de-dramatize its trade battle with the Trump administration and to avoid turning it into an ideological war or a judgment of force.
But Brussels’ bureaucrats have found that they have to do with their counterparts in Washington surprising. One of the biggest problems is that it is unclear who in the Trump administration has any real authority to negotiate.
Europeans are offering to buy more American products, but they cannot accept permanent tariffs at current levels. Some in Brussels are afraid that, Come on July, the Trump administration will simply extend the current regime for another 90 days of negotiation time.
At that point, the EU will have decisions to make. Do you eventually retaliate and at what level? The general assumption is that Europeans will feel forced to hit. The next question is whether revenge will be limited to the goods trade, where the EU has more to lose and its car industry is particularly tangible.
American technology companies are a much more liquid target than Harley-Davids or Bourbon manufacturers. But Brussels’ tangerines should also consider the possibility of the Trump administration responding to technology sanctions asymmetrically by attracting US troops from Europe. This would make Europe much more sensitive to Russian aggression.
Given these unpleasant opportunities – and the unpredictability of the White House – Europeans are doing what comes naturally: taking their time and moving carefully. It has been just over a month since Trump’s “Erationing Day” fees were announced and a large sum has already changed. A safe bet is that there will be much more riots over the next 60 days.
Like the Chinese, Europeans are waiting to see if the gaps begin to appear on American supermarket shelves. They also know that potential fees for pharmaceuticals, while very painful for Europe, can arouse a reaction in the US while the essential price -causing medicines.
The best case scenario for Europeans is that contradictions and self-harm in Trump’s tariffs become increasingly obvious in reaching July, leading to Europe by offering them a much better deal than it seems possible.
The European Commission is determined not to allow all its negotiating energy to be absorbed by an exercise of restriction of damage with the JSC One consequence of Trump’s global tariff warfare is that there is a significant increase in countries that want to negotiate trade agreements with the EU.
Piyush Goyal, the Indian Minister of Trade, was in Brussels last week. A new deal is likely to be signed between the United Kingdom and the EU later this month – clearing some of the most difficult issues left by Brexit. The United Arab Emirates opened free trade negotiations with the EU a few weeks ago. Trade talks with Australia, stalled, have resumed. An agreement with the Latin America’s Mercury Bloc has already been agreed and expects ratification. China is also prone to warming trade relations with Brussels – though Europeans will continue carefully there.
Countries beating a trail to Brussels will find the EU -slowly in motion and bureaucratic. An agreement that Trump would aim to overcome the line in the week would take years to end with the EU. On the other hand, as an Australian trade negotiator puts it: “The good thing about the EU is that if you eventually make a deal with them, you know they will adhere to it.”
The EU has already agreed nearly twice as many free trade agreements than the US and is well established to complete more. The art of the Agreement in Brussels has its own features and disappointments. But it is significantly more serious and stable than the Trump version.
gideon.rachman@ft.com
