A big day, very big. These were the words of US President Donald Trump when he expressed his thoughts on last Wednesday’s summit with EU Commission President Jean-Claude Juncker. Without any doubt, for two leading economies such as the EU and the US, this day could be considered crucial, as their political plenipotentiaries met in Washington to (re)negotiate, inter alia, the parties previous trade deals. However, the results of the meeting may be interpreted in several ways.
BEYOND THE EXPECTATIONS
In March 2018, the US presidential administration decided to impose tariffs on steel and aluminum imports from several countries including the EU Member States. Naturally, this move was not warmly welcomed by EU representatives, as Juncker well expressed when he claimed that the new trade barriers are “totally unacceptable”. This move started a spiral, leading the EU to impose restrictive custom measures on the traditional US exports such as motorbikes, jeans, and bourbon. The trade conflict entered a more heated phase after Trump called the EU ‘a foe’ on the eve of his meeting with Vladimir Putin. On top of this, the US president certainly managed to capture the attention of several German car producers by announcing a possibility of tariffs on the automotive imports to the US. This may be another reason why the expectations of EU countries plenipotentiaries oscillated in the range from “no expectations” to “low expectations” regarding the Trump-Juncker Meeting.
TOWARDS ZERO TARIFFS
Despite the fact that the expectations were rather low, in the joint statement produced during the meeting, the two political leaders announced positive and surprising common intentions. In line with the joint statement and with the speech of Donald J Trump, both parties expressed their commitment towards establishing zero-tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods. The US President also withdrew his earlier statements on automotive import tariffs, while Juncker announced that the EU will push aside its planned extended custom barriers on US products. Additionally, Juncker expressed the intention to become a strong partner of the US in the agricultural sector, by increasing soya beans imports. The leaders have also committed to strengthening the capacities for the LNG transfer, which implies a more intensive cooperation between the EU and the US, which would contribute to the EU energy supply diversification.
QUESTIONING THE REAL EFFECT
Although the final joint statement seems to be promising for both sides, it is not easy to forecast the future of the EU-US trade relations. It is questionable if the “deal was made” Jean-Claude Juncker said. However, it is fair to say that for the time being the trade war between the US and the EU was dismissed and the main aim of the EU delegation, to de-escalate the tensions between two traditional partners and allies, seems to have been successfully accomplished. Despite the huge wave of skepticism, one cannot deny that last Wednesday’s meeting was a big day when “a new phase of relationship between the US and the EU – a phase of close friendship” started.
Author: Tomáš Šándor