Trump is winning a battle in his trade war with europe. We’ll still have to see about the battle with China. Europe runs a 151 billion dollar trade deficit with the United States. They are one of the largest deficits of any world unit of the trading world with most of it being cars. The problem is that the europeans impose a 10% tariff on American cars and we only have a 2.5% tarraf on european cars that are sold in the United States.
Obviously european cars have a
By Dick Morris | DickMorris.com
tremendous advantage. Trump has been talking about that and beating on it. On one hand he’s promoting the idea of zero tariffs and the other hand threatening to raise ours if the europeans don’t go along.
The German car manufacturers, responsible for the bulk of the deficit, have announced that they are willing to go to a zero tariff basis on both imports and exports. If so, it would be huge for the United States and very important of the economy.
Trump’s entire strategy of bombast, confrontation and aggressive posturing has been extremely effective in these negotiations. For that reason he wrote the best selling book, “The Art Of The Deal.” The europeans could read that book and understand Trump’s methodology. He seizes things where he know that he’s right and that the numbers underscore his position and then he goes crazy. Pushing for it, focusing on it and fighting for it.
The results have been immensely positive.
But there’s a deeper perspective. If the United States concludes with a trade agreement with the European Union, which appears to be possible, wouldn’t that be, in effect, like the United States joining the old common market? That custom union lays at the core of the old European Union. Before it was a political association it was an economic union in which there were no tariffs within europe. And that remains at the core of the european project.
By internationalizing that core and extending it across the Atlantic, Trump is actually diluting it by including America. Combining that with the political disintegration that’s going on in southern europe over the euro and the undemocratic imposition of law by the European Union that’s alienating those countries, the erosion of the European Union becomes probable. As that unfolds, the benefit to the United States will be increased economic growth.
