In a surprising move, the European Union and the United States have agreed to stop what seemed to be an imminent trade war.
U.S. President Donald Trump and European Commission leader Jean-Claude Juncker announced a future deal on Wednesday which will focus on lowering tariffs and “trade barriers.”
It is unknown whether these negotiations will permanently end the recent economic battles between the U.S. and its former allies. President Trump seems to be confident about the deal’s outcome.
Both sides reportedly agreed to withdraw their respective tariffs and will attempt to eliminate nontariff barriers and subsidies on industrial goods.
There has been no news on the status of the aluminum and steel tariffs which essentially began the trade wars.
Trump can be a very unpredictable negotiator. This is not the first time that he has been offered an opportunity to negotiate trade deals with other countries.
Trump’s aides reportedly presented him with potential deals with China, and he rejected said offers. Eliminating trade barriers completely could be a huge challenge for all parties involved.
Trump’s decision to openly cooperate with the EU comes as quite a surprise, as he previously referred to the organization as a “foe” and blamed the EU for unfair trade practices. Republicans had expressed concern regarding his actions, stating that he was hurting the national economy and the farming industry more specifically. Republicans apparently urged the president to attempt to cooperate with the EU. This apparently got into Trump’s nerves, as he tweeted:
When you have people snipping at your heels during a negotiation, it will only take longer to make a deal, and the deal will never be as good as it could have been with unity. Negotiations are going really well, be cool. The end result will be worth it!”
Some have expressed skepticism at the idea that this deal will ultimately stop the trade wars, as the EU deal has been compared to a deal with China which was signed earlier this year. Director emeritus of the Peterson Institute for International Economics Fred Bergsten warned economic analysts and businesses against getting their hopes up. He stated:
We have seen something like this movie on the other major trade front only a couple of months ago, and I would just hope that it would not play out in the same way, which at the moment seems to be a stalemate with China.”
Jean-Claude Junker was not previously open to negotiation with the United States. He deemed the U.S.’ tariffs “stupid” and unnecessary, and stated:
“We will now impose tariffs on motorcycles, Harley-Davidson, on bluejeans, Levi’s, on bourbon. We can also do stupid.”
Hopefully, the upcoming deal will end the tariff-for-tariff approach to foreign trade that many countries have been forced to adopt due to the Trump administration’s extreme and abusive measures.
Featured Image via U.S. Department of Defense