The Trump-Europe trade war Economic issues, political strategies and systemic effects

Elissar KARAM

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Executive summary: Back in the White House, Donald Trump revived his strong speech about what he calls “absence of justice” in the global trading system, targeting in particular the EU and China. This firmness was quickly translated into concrete executive measures with the aim of establishing a “trade balance”, according to Trump’s vision. Despite last April’s agreement between Washington and Brussels and the opening of bilateral negotiations, Trump interrupted this process by announcing the imposition of customs duties on European products, which represents a major setback for the European steel industry, which risks collapse due to the combination of several factors. Europeans, on the other hand, have the power to respond, but the fear of an escalation towards the generalized trade war tends to restrict these options, especially in a context where the US President’s intentions and potential scope of protectionist policy remain unclear.

Keywords: Donald Trump, International Trade, Trade War, Tariffs, United States of America, Europe, European Union, China, Trade deficit, Industrial relocation, Economic protectionism, Bond markets, Public debt, Globalization.

Abstract: Back in the White House, Donald Trump revived his tough rhetoric regarding what he calls the “lack of justice” in the global trading system, targeting the EU and China in particular. This toughness quickly translated into concrete executive measures aimed at establishing “trade balance,” according to the vision adopted by the Trump administration. Despite the agreement last April between Washington and Brussels and the opening of bilateral negotiations, Trump interrupted this process by announcing the imposition of customs duties on European products, which represents a major setback for the European steel industry, which risks collapse due to the combination of several factors. The Europeans, however, have assets that allow them to respond, but the fear of an escalation towards a full-scale trade war tends to limit these options, particularly in a context where the intentions and potential scope of the American president’s protectionist policy remain unclear.

Keywords: Donald Trump, International Trade, Trade War, Tariffs, United States of America, Europe, European Union, China, Trade Deficit, Industrial Relocation, Economic Protectionism, Bond Markets, Public Debt, Globalization.