Trump and Juncker sign commercial armistice to everyone's surprise

In detail, the Americans and the Europeans are committed to setting up a working group for more transatlantic free trade. "We have agreed to work towards the goal of zero tariffs, zero non-tariff barriers and zero subsidies on non-automotive industrial goods" Trump explained in reading the European Communiqué

Meanwhile, the threat of taxing up to 25% of European auto imports is suspended while both parties will work to end the war of steel and aluminum even if the the rights imposed by the Americans and the reprisals decided by the Europeans are not suspended. Europeans pledge to buy more natural gas and American soybeans. The two economic groups will work for a reform of the World Trade Organization (WTO).

Trump played it in "North Korea"

What are the lessons to be learned from the case? First, the Europeans got the main thing: the immediate threat of customs duties on the automobile is postponed. "We agreed that no additional duties will be decided as long as we negotiate" badured after the meeting Jean-Claude Juncker. The press release does not set a deadline for negotiations, which satisfies the Europeans. The successive ultimatums launched by the Americans on steel and aluminum put them in a syringe and ultimately led to the imposition of duties. The car is excluded from the zero tariff target, which means that Europe does not capitulate in advance on the subject.

Why did Donald Trump move? The explanation, always easier ex post seems largely internal. The discontent is mounting among US automakers but also the most protectionist industrialists and old darlings of the tenant of the White House, such as the manufacturer of motorcycles Harley Davidson or the manufacturer of washing machines Whirlpool who announced this week of poor results because commercial warfare; Republicans are increasingly recovering in the run-up to the mid-term elections, especially in Midwestern farmland, hit by Chinese and Mexican retaliation for soybeans and pork. As a result, Donald Trump had to announce Tuesday, $ 12 billion in aid to farmers, who did not convince, elected officials believe that the best way to correct the effects of trade wars is not to bail out its victims but to stop these wars.

Added to this are the constantly shifting influence games in the White House: the very protectionist commercial adviser Peter Navarro was absent on Monday and it is the economic adviser, Larry Kudlow, former Reagan and free trade teams that seems to have had the ear of the president. The former TV commentator prepared Tuesday night a draft statement with the teams of Jean-Claude Juncker. Result: Donald Trump, instead of playing "Iranian" played it in "North Korea", and made a spectacular turnaround.

The Europeans gave him some symbolic pledges: the objective ] "Zero Customs Duty" was a long-standing challenge by Mr. Trump to Europeans. The purchase of soybeans, the price of which drops and is not subject to import duties in Europe, may offer an outlet for the farmers hit by the Chinese counter-sanctions – "Thank you for that, Jean-Claude " said Mr. Trump; the acquisition of liquefied natural gas, which will please the oil friends of the tenant of the White House and goes in the direction of a less geostrategic interweaving between Europe – in particular Germany, via the pipeline through the Baltic Northstream – and Russia.

Unity on the backs of the Chinese

In the negotiations, the Americans contradicted each other in front of Donald Trump and the dumbfounded European delegation. The hardest of the Trump team, the trade representative Robert Lighthizer or even the treasure secretary Steve Mnuchin would have wanted to include agricultural products in the zero tariff goal. Juncker said he did not have a mandate from the 28 member states and suggested that in this case, the Europeans would demand the end of the "buy american act", which protects American companies in the markets. public, and American sacred cow.

Finally, the unit was rebuilt on the backs of the Chinese. The reform of the World Trade Organization implies, in the words of Donald Trump's communiqué, "to deal with the problem of unfair trade practices, including theft of intellectual property, the forced transfer of technology, industrial subsidies , the distortions created by state-owned enterprises and overcapacity ". So, the United States and Europe are now block, according to Donald Trump: "The United States and the European Union together account for more than 850 million citizens and account for half of world GDP . In other words, together we make up more than 50% of the trade. If we team up, we can make our planet better, safer and more prosperous.

Two questions remain. First, the reaction in Europe to this negotiation with Trump's America, less than a year away from the European elections. Jean-Claude Juncker believes that this is not a revival of the transatlantic free trade treaty, strongly contested by public opinion, including French and German. It considers that it does not need a negotiating mandate and that it will be requested, if necessary, from the Member States, once the working group, chaired by Trade Commissioner Cecilia Malmströem and the representative to the Trade Robert Lighthizer will have reached the end of his work – "in a few months" hopes Juncker. Second question, will Donald Trump do with Europe what he did in the spring with China: announce an armistice in the trade war and start the attack more beautiful after being criticized by his public opinion and his own advisers? But for now, Europeans have little better option than to trust Donald Trump. They hope to finish negotiations by tweets and invectives. The answer will come quickly.