If you’re sitting across from somebody and you throw a dead fish on the table, it doesn’t say much if the sum of your deal-making ability is to negotiate removing the fish you put there in the first place.
US president Donald Trump has dropped the rotting fish down in front of European leaders by following through with taxes of 25 per cent on all steel and aluminium sold into the US from abroad.
The EU said it would respond to these “unjustified” tariffs, with its own counter measures on more than €20 billion worth of US imports to EU states.
The EU tariffs will target products and trade coming from Republican states, in an attempt to put pressure on the White House.
The European Commission, the EU executive arm responsible for the bloc’s trade policy, has been preparing for this moment since Trump’s election.
On the campaign trail Trump spoke about introducing sweeping tariffs on all imports from abroad, making those products more expensive for US customers to buy.
Countries who sell more goods to the US than they buy back are in his crosshairs. This includes Ireland, given its trade surplus from the huge flow of pharmaceutical exports to the US. Trump’s initial tariffs on steel are expected to be followed by much broader ones.
This is familiar territory for the commission. During Trump’s first term he also slapped tariffs on European steel and aluminium.
In response the EU levied taxes on imports of bourbon whiskey, motor boats and Harley Davidson motorbikes. Those tariffs, which cover an estimated €4 billion worth of US goods, will now kick back in on April 1st.
Officials in the commission’s trade department are preparing to target a further €18 billion of US goods, with tariffs of up to 25 per cent.
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Possible US exports in the firing line include poultry, beef, eggs, dairy, beer, wine, handbags and other clothes, tobacco products, vapes, home appliances, as well as steel and aluminium. Those will come into effect later in April, after a short consultation period.
Similar to the tariff dispute during Trump’s first term, the aim is to make the US president feel some pain politically and bring him to the negotiating table. The fear is that an escalatory cycle of more tariffs and counter-tariffs will spin into a full blown EU-US trade war.
The EU executive appears to be struggling to open up a decent line of communication to the White House. Commission president Ursula von der Leyen even had a few words with Taoiseach Micheál Martin at the weekend, ahead of his sit down with Trump on Wednesday, one source confirmed.
Trump has said he feels the EU has been getting the better of the US when it comes to trade, so may be in no mood to negotiate with the commission.
Even if some deal is struck to avoid a trade war, EU-US relations will be badly bruised by the time it takes to get there. “Wow we’ve a great result, we’ve no stinking fish on the table,” one EU official joked at the prospect.
