Did We Just Dodge a Trade War With Europe?
It's too soon to call this a truce in the trade war. But we may have a temporary ceasefire.
President Donald Trump and Jean-Claude Juncker, president of the European Commission, held a joint White House press conference on Wednesday afternoon to announce an agreement to work towards ending the budding trade war between the United States and the European Union.
Though details remain sketchy, it seems too soon to call this a truce in the trade war—more like an agreement to stop further escalations of the conflict, at least for now, in the hopes that a truce can be worked out.
At that press conference, Trump said a deal with the E.U. would would be a "win" on both sides of the Atlantic. He said Europe would agree to buy more soybeans and liquefied natural gas from the U.S.
In a joint statement, Trump and Juncker agreed to "work together towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods," but offered few specifics beyond the vague promises to increase soybean and natural gas trade. The two leaders also promised "to launch a close dialogue on standards in order to ease trade, reduce bureaucratic obstacles, and slash costs." Again, that all sounds great but it leaves out the important details about how those things will be accomplished.
In the end, what Trump and Juncker outlined Wednesday sounds more like a handshake deal that could lead to a formal deal—but also might not.
"It's just a big nothingburger," Dan Ikenson, director of the Cato Institute's Center for Trade Policy Studies, told Reason. "As expected, there were no agreements reached."
Though, he added, "at least Juncker and Trump got some face time."
That the two sides are talking and at least trying to give the impression of working towards a deal is important, but it's probably right to remain skeptical of Wednesday's supposed deal.
After all, we've seen this page from the Trump playbook before. In April, shortly after slapping tariffs on steel and aluminum imports and targeting $34 billion worth of Chinese goods with additional tariffs, Trump met with Chinese officials in Washington. What at first seemed to be a productive meeting that reportedly included concessions from China ended up being little more than a brief respite before further escalations ensued. The two sides now seem to be much farther apart, with Trump threatening last week to place tariffs on literally all goods imported from China and Chinese officials recently telling Politico that they don't even know what Trump's goals are—something that makes it decidedly more difficult to engage in serious negotiations.
Hopefully, Wednesday's agreement between Trump and Juncker is a more significant deal—or at least the pathway to a more significant deal. Only time will tell.