MUNICH — Donald Trump may have extended the grace period by one month, but make no mistake about it, he's still holding a gun to Europe's head in the tariffs dispute. The EU shouldn't have any illusions: To get what he wants, Trump will continue his attempted extortion. And why not? It's worked elsewhere, after all.
It's high time, therefore, to find a European response to this wild-west policy approach. And if this doesn't succeed, the sheriff in the White House certainly won't shy away from a trade war in which there will only be losers in the end.
Europeans can't say they weren't warned. Already when Trump visited the EU and NATO, a year ago, he brought two clear messages with him. The first was that the German trade surplus is too high. That second, that the allies should, as agreed, spend more money on defense. The messages haven't changed since then. The Europeans — especially Germany — wanted to wait and see if Trump would put his threat to operation and actually impose import tariffs on goods from Europe.
Since the U.S. President heralded the customs countdown, the unrest has been huge. Trump's flimsy justification that Europeans were endangering U.S. national security with their steel and aluminum products is pure protectionism and nothing can justify it. But that's not Trump's point. He doesn't care about the rules of the World Trade Organization. The government in Washington made it clear in talks with the EU that it wants to use the tariffs threat as a lever to push down other trade restrictions — especially European import tariffs on U.S. cars.
Anything else would be seen as a sign of weakness.
The EU must adopt a twin-track strategy: be constructive in its approach, but also tough. In the case of the heavy tariffs threat on steel and aluminum, Europeans must not deviate from their position. Anything else would be seen as a sign of weakness and would only validate Trump's worldview. So if the U.S. president imposes tariffs in a month's time, the EU will have to take lawful retaliatory measures. These include tariffs on American products, which have a certain symbolic value and hit those states where Trump's allies are in charge: jeans, bourbon and Harley-Davidson motorcycles.
Still, it would be better if it didn't come to that at all. The EU must therefore no longer allow itself to be backed into a corner by Trump, but rather make a proposal for a bilateral agreement itself. This is all the more true given how Washington didn't bite on Europe's offer to take joint action against China (Trump prefers to go it alone).
Europe should admit to Trump that he's quite right.
That won't do it. And so the EU must rely on dialogue. Europe should admit to Trump that he's quite right in his criticism. This applies in particular to the German trade surplus, which was a thorn in the side of past U.S. presidents as well. A comprehensive agreement such as the Transatlantic Trade and Investment Partnership in unrealistic. But a deal could be reached in the form of a contract covering certain sectors.
This would already be difficult enough for the EU because the interests of Germany (cars) and France (agriculture) — to mention just two of the Union's member states — are extremely different. But there's one thing that the Europeans must not allow to happen under any circumstances: let Trump divide them.
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