Some $7.5 billion of new US trade tariffs on the European Union, which went into effect yesterday (Friday), underscore one of the most befuddling aspects of the Trump presidency. Although President Trump’s own National Security Strategy has shifted American focus to tackling our new era of major power competition, he continues to engage in trade skirmishes with the allies he needs most for this larger struggle.
Recent days have left even Trump administration loyalists and insiders – both current and past — scratching their heads about the degree to which President Trump has been doubling down on what they consider one of his most consistent and counter-productive traits, one that is apparent from Syria’s war zone to the Brussels Eurocracy.
Off-the-record, they’ll tell you that they’ve been unable to convince the President that disregarding, mistreating and, most recently, even abandoning allies (as recently has been the case with Syrian Kurds) runs counter to achieving President Trump’s loftiest foreign policy objectives, most of which they support.
If President Trump wishes to change China’s unfair economic practices, if he wishes to tackle Iran as a malevolent actor, if he wishes to pressure and negotiate North Korea away from its nuclear weapons or to transform Venezuela from a rogue dictatorship to a democratic contributor – and it is hard to quibble with any of those goals – getting there requires engaged and cooperative allies.
These insider critics think now would be an ideal time to deploy what until recently was America’s greatest, global competitive advantage: its international, interlocking system of allies and alliances, both informal and those formalized by treaty. Instead, across several fronts the United States has taken actions that have raised doubts among allies, who feel the geopolitical tectonic plates shifting beneath their feet.
On that score, Secretary of State Mike Pompeo was in the Middle East this week reassuring Israeli leaders, among others, that the President’s decision to withdraw troops from northeastern Syria – which faced an unusual bipartisan rebuke from Democrats and Republicans in the House of Representatives – wouldn’t influence America’s other obligations.
It was telling that his trip came on the heels of Russian President Vladimir Putin’s own trip this week to the region, where US allies Saudi Arabia and the UAE both provided him red-carpet treatment. On a recent trip to the Middle East, what I heard from some of our closest friends was that as much as they prefer close relations with Washington to those with Moscow, they must deal both with the reality of Russia’s growing presence in their region and greater consistency.
Said the Economist this week, “However understandable the frustration (with the Middle East), the thoughtless abandonment of the region would be self-defeating. It undermines America’s credibility around the world, which means that the United States will have to work harder and spend more to get its way on issues that are vital to its people’s prosperity and their way of life.”
The magazine lists potential knock-on effects that include Turkey’s continued drift from NATO and increased alliance divisions, Putin’s potential test of the Baltic states on Russia’s border, the Taliban’s doubling down to test American resolve in Afghanistan, and China’s likely determination to “steadily press its territorial claims against its neighbors.”
On trade issues, the Trump administration’s first “own goal” regarding China came at the beginning of the administration when it walked away from talks toward a Transpacific Partnership (TPP) agreement that would have created a crucial regional free-trade counter to China’s growing economic leverage across Asia. The other eleven partners in the negotiation, which began under the Obama administration, signed an agreement, but the US was left on the sidelines, giving the deal less global weight and Washington little benefit.
If transatlantic trade negotiators had started with the premise that working cooperatively with European partners is a growing priority at this historic moment, they would have begun working months ago at heading off Friday’s ratcheting up of the US-European trade dispute – with 10% tariffs on aircraft and 25% on goods such as cheese, wine and whisky — realizing common cause would be required as talks with China near their end-game.
For example, with US leadership, the two sides could have headed off what will likely now become a tit-for-tat set of punitive tariffs that will harm both Airbus and Boeing at a time when the real, rising threat to their duopoly globally inevitably will come from China. While it is true that the latest round of aircraft tariffs had the blessing of the World Trade Organization, it is also likely that a new WTO finding in coming months will result in retaliatory EU tariffs on Boeing.
Instead of the introduction of new US tariffs on other European goods this week – potentially to be followed in mid-November with new auto tariffs – the two sides should have revived efforts at creating a Transatlantic Trade and Investment Partnership. It is the kind of deal that would fit philosophically in the Trump administration wheelhouse as it would be bilateral in nature, since members of the European Union are unable to negotiate trade outside the union.
The benefits for growth and employment are compelling, while at the same time reducing tensions and creating common cause between the world two largest economies. The US and European Union together account for a third of global GDP, measured in purchasing power parity, they account for 64% of outward foreign direct investment and for half of global personal consumption.
It’s worth recalling Defense Secretary James Mattis’ words in his letter of resignation when he stepped down from the Trump administration in December 2018. “We must do everything possible to advance an international order that is most conducive to our security, prosperity and values, and we are strengthened in this effort by the solidarity of our alliances.”
Conversely, little will be accomplished in the interest of the United States and its allies, at this defining moment in global history, should alliance structures and trust deteriorate further.
Frederick Kempe is a best-selling author, prize-winning journalist and president & CEO of the Atlantic Council, one of the United States’ most influential think tanks on global affairs. He worked at The Wall Street Journal for more than 25 years as a foreign correspondent, assistant managing editor and as the longest-serving editor of the paper’s European edition. His latest book – “Berlin 1961: Kennedy, Khrushchev, and the Most Dangerous Place on Earth” – was a New York Times best-seller and has been published in more than a dozen languages. Follow him on Twitter @FredKempe and subscribe here to Inflection Points, his look each Saturday at the past week’s top stories and trends.