Trump delays EU tariffs at the 11th hour

The threat of a US trade war hangs over Europe for another month, says Matthew Partridge.

894-merkel-634

Can a US-EU deal be done?
(Image credit: This content is subject to copyright.)

European negotiators "will need to sweat through another month of heat" as Donald Trump's administration "presses them for more concessions", says Tory Newmyer in The Washington Post. Although the US president decided "at the 11th hour" to delay the planned tariffs on industrial metals until June, he is still demanding "quotas that would limit European imports". Europeans, meanwhile, are baulking "at negotiating under the tariff threat".

Quite right too, says the FT's Wolfgang Munchau. Any concession from Brussels, such as a voluntary export restraint, could be "dangerous". Not only would it mean losing face, a deal might unravel swiftly given Trump's unpredictability. Some form of retaliation is inevitable if Trump does impose tariffs, but the EU's "best longer-term bet is to continue the slow process of exporting its influence through trade diplomacy, involving the US where possible and going round it where not".

It may be too late for that, says Hans Von Der Burchard in Politico. Cracks in the "proclaimed unity of the EU" are starting to show. Brussels has already indicated it is "ready to work" with Trump and crack down on China's overproduction of subsidised steel; Germany's "all-powerful motor industry is terrified of a trade war" and minded to "strike a bargain". Some in Berlin even hope the dispute could spark trade talks along the lines of the "doomed Transatlantic Trade and Investment Partnership", says Handelsblatt although this would be a "tall order" since it would require a mandate from the EU's 28 member states.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri