LONDON – President Donald Trump has overturned the global economy by slapning tariffs on the world, including two of the biggest exporters of China and the European Union. One sounds and the other appears to be breathing in.
Although Beijing vowed to “fight to the end” of an increasingly ferocious trade war, the European Union has adopted a seemingly systematic approach, voted only on Wednesday to address the “unfair and damaging” import taxes on steel and aluminum Trump announced in February.
Critics defend their supporters as subtle and long-term, the lack of EU agility, as nuanced and long-term, as glacial responses of timber bureaucracy, and perhaps even the flaws of democracy itself.
The unspecified “measures” announced on Wednesday came into effect on April 15th. However, the 27 members of the bloc are still pondering how they will respond to the White House global tariffs that have collapsed stock prices over the past week.
Meanwhile, China’s policy is largely decided by President Xi Jinping, one man who actively refuted it. Earlier on Wednesday, Beijing vowed to increase retaliatory tariffs on all American goods to 84% and “fight to the end” in this mutually painful conflict.
“They’re thinking about the importance of the public policy,” said Planesh Narayanan, a researcher at the Institute of Public Policy, a London think tank. “Both China and the EU have different goals, different geopolitical relationships with the US, different decision-making processes.”
Trump describes both Beijing and Brussels as competitors. This is a departure from the previous president who viewed Europeans as trading partners, cultural and military allies and friends. He repeatedly misrepresents both trade deficits, and warning retaliation is met with even more extreme measures.
Some Trump’s team has asserted that this is a policy, not a negotiation tactic. The president himself proposed the opposition.
“These countries are calling us and kissing my ass,” Trump said Tuesday at dinner in Washington.
He called on China to follow the lawsuit, saying on Tuesday, “We’re waiting for their phone call. That’s going to happen!”
However, there is little evidence that China is planning to blink first.
Last week, it coincided with Trump’s new 34% tariffs. And on Wednesday he went all the way to his toes and the president said he would impose if China did not withdraw its initial retaliation.
The Chinese Treasury Department said Trump’s “escalation” was “a serious violation of China’s legitimate rights and interests, serious damage to the system of multilateral trading under regulations, and serious impact on the stability of the world economic order.”
China has said that Rick Waters, a former State Department diplomat who is now Singapore-based Carnegie China’s Singapore-based director, “we are suppressing trade tensions for a long time, hoping that the US side can last longer.”
“The Chinese are proud. They have a history of humiliation in the hands of foreign powers,” he said. “And I think these kinds of tactics come to their defensive instincts.”
In contrast to XI rules, 27 EU member states must agree to trade policies through a two-thirds majority.
It’s not easy for Europe to be caught up in the fierce populists who have made connections with the Trump White House.
One of them is Italian Prime Minister Giorgia Meloni, who must balance her praise on Trump with the pain that his tariffs are threatened by her country. She insisted on de-escalation to “prevent a trade war” before visiting Washington next week.
“It’s difficult to cajole the consensus,” says Paola Subaci, professor of economics at the University of Bologna. “But all of these opinions are under the same umbrella of self-interest. Countries want to do their best for themselves.”
Subacchi is one of those who believe that the EU’s consensus-based approach could indeed be a strength. As we look to Beijing, where tariffs are much higher than Europe, we have time to adjust our replies.
Waiting for the beat “inflation will start to affect US consumers and the reality of Trump’s policy will begin to come true,” said Elvire Fabry, a senior researcher at the Jacques Delors Institute, a think tank partially funded by the EU and French governments. “I think Europe is in a better position to use it and retaliate.”
For all their differences, the EU and China are currently working on Trump’s tariffs. European Commission Chairman Ursula von der Leyen spoke with Prime Minister Li Qiang, deputy commander of XI on Tuesday. Some experts say this should warn Trump.
“The fact that the administration soon came out against nearly 70 countries makes me worried that it actually improved China’s position,” Waters said. “Now you’re because Europe and China are talking to each other.”
In Europe, “bazookas” (officially anti-forcement devices) have “bazookas.” This is a framework that allows various punishments to be imposed in response to “economic coercion.”
“Based on fake analysis, data and economic understanding, the games the US plays are extremely dangerous,” Subachi said.
“No matter what Trump and his advisors think, the US will receive a huge amount of capital inflows as foreign investors trust the dollar and trust the US Treasury,” she added. “This ‘Day of Liberation’ has just melted all of this confidence and trust. ”