President Donald Trump is not known for backing down, but the Europeans are coming to Washington anyway to see if they can convince him to rein in his trade policies.
Less than two weeks after calling the European Union a “foe,” Trump will meet with European Commission President Jean-Claude Juncker at the White House on Wednesday. The sit-down comes as the 28-country bloc is fuming about the administration’s decision to slap hefty tariffs on imported steel and aluminum, and is hoping to dissuade the president from imposing new tariffs on imported cars.
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Juncker has been one of Europe’s most vocal critics of Trump’s trade policies. In March, he called the president’s aluminum and steel tariffs “stupid.” Warning that Europe would retaliate with tariffs on U.S. products, he added, “We can also do stupid.”
Former officials expect Wednesday’s White House meeting to be tense.
“The negotiating view of Donald Trump is unconditional surrender of the other side,” said Ivo Daalder, who served as the U.S. ambassador to NATO during the Obama administration. “If you’re a betting person, it’s not going to be a great meeting.”
The president, for his part, has shown little interest in rolling back his trade policies. He campaigned on an aggressive trade platform and he is reluctant to waver publicly, for fear of angering his supporters.
“You have to see these trade deals I’m working on, they are a disaster,” Trump said on Tuesday during a speech in Missouri. “We’re losing hundreds of billions of dollars with individual countries a year. And you’ve got to stick it out. You’ve got to fight it. Nobody else fought it.”
Earlier in the day, he tweeted: “Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!”
And after returning to the White House from Missouri on Tuesday night, the president posted on Twitter : “The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready — but they won’t!“
Republicans in Congress and some of Trump’s own advisers are hoping he won’t move forward with the auto tariffs, arguing that they would greatly harm the U.S. economy and cost American jobs.
Trump’s trade agenda is already having negative effects, especially in the U.S. agriculture sector. And in an apparent acknowledgment of the fallout from Trump’s policies, the administration is planning to announce on Tuesday about $12 billion in aid to farmers hurt by retaliatory tariffs from China, the EU and other countries.
Trump and Juncker have had several interactions over the last 18 months – and they’ve often been tense. One person who tracks European politics closely said Juncker “doesn’t suffer fools lightly.” Juncker, like other world leaders, was exasperated by Trump’s critiques of the European Union on trade during the June G-7 summit in Canada, according to a person familiar with the meeting.
European officials say they are unsure exactly what to expect when Trump and Juncker sit down on Wednesday, and they initially feared the U.S. president might snub Juncker or give him just a few minutes of his time. But the two men are slated to sit down for a one-on-one meeting, followed by an expanded meeting with officials from Europe and the United States.
While European officials insist that Wednesday’s meeting won’t be a negotiating session, Juncker will nonetheless come prepared to discuss two proposals aimed at de-escalating the tensions between the EU and the United States – in exchange for a commitment to lift the steel and aluminum tariffs and exempt Europe from any future auto tariffs.
One idea Juncker will raise Wednesday would be for the United States, the EU, Japan, South Korea and other nations that are significant makers of autos and auto parts to negotiate a “plurilateral” agreement aimed at reducing tariffs on those products to zero, according to a senior European official.
The second idea Juncker will raise would be to negotiate a limited free trade agreement between the United States and the EU focused only on industrial tariffs, the official said. Under such a pact, the U.S. and the EU could eliminate tariffs on each other’s auto exports, but they wouldn’t be obliged to provide duty-free treatment for other countries.
Trump’s tough trade talk has often perplexed foreign officials. “I went to some of the countries, I said, ‘How did it get so imbalanced?’ They said ‘Nobody ever called.’ They said ‘nobody ever called.’ They do whatever they wanted and we just put up with it. Not any longer,” Trump said during his speech in Missouri Tuesday.
In the EU’s view, bilateral trade between the United States and the EU is largely in balance, despite Trump’s complaints about the U.S. goods trade deficit with the EU, which totaled $151 billion last year.
However, the U.S. had about a $55 billion trade surplus in services trade with the EU, and American firms doing business in Europe earned about $95 billion more in net income than European firms operating in the United States, the senior EU official said.
In that regard, a big part of Juncker’s task will be simply to try to better understand what Trump is asking the EU to do, the European official said.
“We’re still trying to figure out what the question is, so we can get the right answer,” he said.
The EU is willing to enter into negotiations with the United States to address bilateral trade concerns on both sides of the Atlantic, as it was doing with the Obama administration in talks on the proposed Transatlantic Trade and Investment Partnership, the senior European official said.
But if Trump wants the EU to take some specific efforts to reduce the bilateral trade deficit, he’s likely to be disappointed because there’s not a lot the EU can do to address that concern, the official said.
Neither European officials nor members of Trump’s own administration know whether the president open to negotiating with Juncker. ”The fundamental political question is whether Trump wants to reach an agreement or does he see a political benefit to stoking a sense of aggrievement with the rest of the world between now and the midterm election,” said Jeffrey Rathke, the deputy director of the Europe Program at the Center for Strategic and International Studies.