Month: July 2018

Checking out a speedboat, a fighter jet and a giant industrial magnet parked on the White House driveway, President Donald Trump showcased an array of “Made in America” products Monday as his administration pushes back aggressively against critics who say his punishing tariffs on imported goods threaten to harm the U.S. economy.

Trump’s event with a smorgasbord of American goods came at the start of a week in which trade discussions are expected to dominate, including talks with European officials and a trip to Illinois in which the president is planning to visit a community helped along by his steel tariffs.

Trump has vowed to force international trading partners to bend to his will as he seeks to renegotiate a series of trade deals he has long argued hurt American workers. But as he deepens the U.S. involvement in trade fights, it raises questions on whether American consumers will feel the pain of retaliatory tariffs — and whether the president will incur a political price for his nationalistic trade policies in the 2018 midterm elections.

“Our leaders in Washington did nothing, they did nothing. They let our factories leave, they let our people lose their jobs,” Trump said at the White House. “That’s not free trade, that’s fool’s trade, that’s stupid trade and we don’t do that kind of trade anymore.”

Trump noted that he would be meeting Wednesday with European officials, including European Commission President Jean-Claude Juncker. The U.S. and European allies have been at odds over the president’s tariffs on steel imports and are meeting as the dispute threatens to spread to the lucrative automobile business. “Maybe we can work something out,” he said.

On Thursday, the president will visit Granite City, Illinois, the home of a U.S. Steel Corp. mill that has reopened after he imposed tariffs on steel imports.

On the South Lawn, the president walked among a number of products manufactured across the nation, including a Lockheed Martin F-35 aircraft from Maryland, a Ford F-150 pickup truck from Michigan, a Newmar recreational vehicle from Indiana and a Ranger speedboat from Arkansas.

National security

Trump has already put taxes on imported steel and aluminum, saying they pose a threat to U.S. national security, an argument that enrages staunch U.S. allies such as the European Union and Canada.

He’s threatening to use the national security justification again to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion.

And he’s already imposed tariffs on $34 billion in Chinese imports in a separate dispute over Beijing’s high-tech industrial policies. He has threatened to ratchet that up past $500 billion.

“He likes tariffs,” said William Reinsch, a former U.S. trade official under President Bill Clinton now at the Center for Strategic and International Studies. “His preferred remedy is always tariffs, whether it makes any sense or not.”

“It’s a policy of victimization: ‘Other people have been taking advantage of the United States for years. … Now they have to pay,”‘ Reinsch said, echoing the president’s argument.

Trade analysts say the United States has not pursued such aggressive trade policies in decades.

“I can’t think of another time when you had as many battles and, particularly, as many battles with no resolution in sight,” said Edward Alden, senior fellow at the Council on Foreign Relations.

Trade war

In 1971, President Richard Nixon imposed a broad 10 percent import tax for four months to pressure Japan and European countries to drive up the value of their currencies. The idea: provide relief to American exporters, who were being put at a price disadvantage by a strong dollar.

In 1930, the U.S. raised tariffs dramatically to protect American industry, encouraging other countries to do the same in a global trade war that made the Great Depression worse.

Economists said the tariffs that Trump has imposed so far — and the resulting retaliation — are unlikely to do much economic damage. But things could escalate rapidly.

“If you look at what’s teed up, particularly with China and with the auto tariffs, pretty soon you are talking about some pretty large numbers. Those will do some real damage,” Alden said.

Oxford Economics has calculated that a full-blown U.S.-China trade war — in which each country taxes all the other’s imports — would shave 1 percent off the U.S. economy and wipe out 700,000 jobs in the United States by 2020.

The Peterson Institute for International Economics has estimated that a trade war over autos could cost up to 1.2 million American jobs.

Critics said Trump’s aggressive approach makes it tough for other countries to offer concessions, lest they be seen by their own people as caving in to bullying.

“The Trump administration has not left an easy path to walk away from the fights they’ve created,” Alden said.
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European Commission President Jean-Claude Juncker will not arrive in the United States for talks with U.S. President Donald Trump with a specific trade offer, the Commission said on Monday.

Juncker will travel to Washington on Wednesday for talks focused on trade tensions after the U.S. imposition of tariffs on EU steel and aluminum and Trump’s threats to extend those measures to European cars.

Trump’s top economic adviser, Larry Kudlow, has said he expected Juncker to come with a “significant” trade offer, but the Commission on Monday that would not happen.

“I do not wish to enter into a discussion about mandates, offers because there are no offers. This is a discussion, it is a dialogue and it is an opportunity to talk and to stay engaged in dialogue,” Commission spokesman Margaritis Schinas told a news conference.

Trump has repeatedly complained about the European Union, pointing to the higher duties it applies for car imports and describing the bloc as a “foe” in trade.

EU officials have said that, while EU import duties for cars are heavier than those of the United States, for other products, such as trucks, U.S. rates are higher. They also say cutting duties for cars could only be part of a broader trade deal.

European Trade Commissioner Cecilia Malmstrom, who will accompany Juncker, said last week that the European Union was preparing a list of U.S. products to hit if the United States imposed tariffs on EU cars.

Schinas said Juncker was “very prepared” to set out European arguments.

“This is an occasion to de-dramatize any potential tensions around trade and to engage in an open and constructive dialogue with our American partners,” he said.
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“Heightened trade and geopolitical tensions” are putting global economic growth at risk, G-20 finance ministers said after two days of meetings in Buenos Aires on Sunday.

In their final communique, the Group of 20 ministers stressed the need to “step up dialogue and actions to mitigate risks and enhance confidence.”

The ministers, representing industrial and emerging-market nations, described the overall world economic growth as “robust,” but expressed concerns over what they call the increased risks of the “short and medium term.”

They did not mention the United States by name in their closing statement. But some decried President Donald Trump’s tough trade rhetoric and tariffs on Chinese and European imports.

European Union finance chief Pierre Moscovici urged the U.S. to act like allies, not foes. French finance minister Bruno Le Marie accused Trump of creating a “survival of the fittest” trade mentality and called on Washington to “de-escalate.”

Trump has imposed tariffs on imports of European steel (25 percent) and aluminum (10 percent) while also slapping billions of dollars in tariffs on Chinese goods and threatening more.

He has also accused China and the EU of keeping their interests rates and currencies low, damaging the U.S. dollar on the world market.

 
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Prime Minister Theresa May’s plans to leave the European Union are overwhelmingly opposed by the British public and more than a third of voters would support a new right-wing political party committed to quitting the bloc, according to a new poll.

May’s political vulnerability was exposed by the survey which found voters would prefer Boris Johnson, who quit as her foreign minister two weeks ago, to negotiate with the EU and lead the Conservative Party into the next election.

Only 16 percent of voters say May is handling the Brexit negotiations well, compared with 34 percent who say that Johnson would do a better job, according to the poll conducted by YouGov for The Sunday Times newspaper.

With a little more than eight months to go before Britain is due to leave the EU on March 29, 2019, May’s government, parliament, the public and businesses remain deeply divided over what form Brexit should take.

May’s plans to keep a close trading relationship with the EU on goods thrust her government into crisis this month and there is speculation she could face a leadership challenge after two of her most senior ministers, including Johnson, resigned in protest.

Only one in 10 voters would pick the government’s proposed Brexit plans if there were a second referendum, according to the poll. Almost half think it would be bad for Britain.

The new Brexit minister Dominic Raab said on Sunday the prime minister was still trying to persuade members of the cabinet that her strategy was the best way forward.

Raab also warned that Britain could refuse to pay a 39 billion pound ($51 billion) divorce bill to the EU if it does not get a trade deal – a threat used before by ministers.

No deal Brexit

Speaking to the BBC, Raab refused to deny reports the government is planning to stockpile food or use a section of motorway in England as a lorry park to deal with increased border checks if Britain leaves the EU without a deal.

Asked about a story in The Sun newspaper that the government was planning to stockpile processed food, Raab initially replied “no” and then added: “That kind of selective snippet that makes it into the media, to the extent that the public pay attention to it, I think is unhelpful.”

The possibility of leaving without a trade deal has increased with May facing rebellions from different factions in her party. She only narrowly won a series of votes on Brexit in parliament last week.

The Sunday Times poll found voters are increasingly polarized, with growing numbers of people alienated from the two main political parties.

Thirty-eight percent of people would vote for a new right-wing party that is committed to Brexit, while almost a quarter would support an explicitly far-right anti-immigrant, anti-Islam party, the poll found.

Brexit campaigner Nigel Farage and U.S. President Donald Trump’s former adviser Steve Bannon are in discussions about forming a new right-wing movement, according to The Sunday Times.

Half of voters would support remaining in the EU if there were a second referendum, the poll found, a level of support found in other surveys this year.

YouGov spoke to 1,668 adults in Britain on July 19 and 20, according to The Sunday Times, which did not provide other details about how the poll was conducted.
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Prime Minister Theresa May’s plans to leave the European Union are overwhelmingly opposed by the British public and more than a third of voters would support a new right-wing political party committed to quitting the bloc, according to a new poll.

May’s political vulnerability was exposed by the survey which found voters would prefer Boris Johnson, who quit as her foreign minister two weeks ago, to negotiate with the EU and lead the Conservative Party into the next election.

Only 16 percent of voters say May is handling the Brexit negotiations well, compared with 34 percent who say that Johnson would do a better job, according to the poll conducted by YouGov for The Sunday Times newspaper.

With a little more than eight months to go before Britain is due to leave the EU on March 29, 2019, May’s government, parliament, the public and businesses remain deeply divided over what form Brexit should take.

May’s plans to keep a close trading relationship with the EU on goods thrust her government into crisis this month and there is speculation she could face a leadership challenge after two of her most senior ministers, including Johnson, resigned in protest.

Only one in 10 voters would pick the government’s proposed Brexit plans if there were a second referendum, according to the poll. Almost half think it would be bad for Britain.

The new Brexit minister Dominic Raab said on Sunday the prime minister was still trying to persuade members of the cabinet that her strategy was the best way forward.

Raab also warned that Britain could refuse to pay a 39 billion pound ($51 billion) divorce bill to the EU if it does not get a trade deal – a threat used before by ministers.

No deal Brexit

Speaking to the BBC, Raab refused to deny reports the government is planning to stockpile food or use a section of motorway in England as a lorry park to deal with increased border checks if Britain leaves the EU without a deal.

Asked about a story in The Sun newspaper that the government was planning to stockpile processed food, Raab initially replied “no” and then added: “That kind of selective snippet that makes it into the media, to the extent that the public pay attention to it, I think is unhelpful.”

The possibility of leaving without a trade deal has increased with May facing rebellions from different factions in her party. She only narrowly won a series of votes on Brexit in parliament last week.

The Sunday Times poll found voters are increasingly polarized, with growing numbers of people alienated from the two main political parties.

Thirty-eight percent of people would vote for a new right-wing party that is committed to Brexit, while almost a quarter would support an explicitly far-right anti-immigrant, anti-Islam party, the poll found.

Brexit campaigner Nigel Farage and U.S. President Donald Trump’s former adviser Steve Bannon are in discussions about forming a new right-wing movement, according to The Sunday Times.

Half of voters would support remaining in the EU if there were a second referendum, the poll found, a level of support found in other surveys this year.

YouGov spoke to 1,668 adults in Britain on July 19 and 20, according to The Sunday Times, which did not provide other details about how the poll was conducted.
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German industry groups warned Sunday, ahead of a meeting between European Commission President Jean-Claude Juncker and U.S. President Donald Trump, that tariffs the United States has recently imposed or threatened risk harming the U.S. itself.

The U.S. imposed tariffs on EU steel and aluminum June 1, and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting Wednesday.

Dieter Kempf, head of Germany’s BDI industry association, told the Welt am Sonntag newspaper it was wise for the European Union and United States to continue their discussions.

German auto industry

“The tariffs under the guise of national security should be abolished,” Kempf said, adding that Juncker needed to make clear to Trump that the United States would harm itself with tariffs on cars and car parts.

He added that the German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported to other countries from the U.S. 

“Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.

Lowered expectations

EU officials have sought to lower expectations about what Juncker can achieve and downplayed suggestions that he will arrive in Washington with a novel plan to restore good relations.

Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag he welcomed Juncker’s attempt to persuade the U.S. government not to impose tariffs on cars.

“All arguments in favor of such tariffs are … ultimately far-fetched,” he said.

The German economy had for decades counted on there being open markets and a reliable global trading system, Schweitzer said, but he added of the current situation: “Every day German companies feel the transatlantic rift getting wider.”
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