President Donald Trump’s aim of making America great again with tougher policies on immigration and trade are doomed, according to the official in charge of the European Union’s trade affairs.
“Those who in the 21st century think that we can become great again by rebuilding borders, reimposing trade barriers and restricting people’s freedom to move, they are doomed to fail,” Trade Commissioner Cecilia Malmström said in a speech. “Building a wall is not the answer.”
Europe’s politicians need to keep their spirits up after being thoroughly disoriented by the election of a man who rejects the open markets and borders that the EU has relied on to drive both prosperity and political integration. They’re also acutely aware of the new President’s support for the U.K.’s decision to leave the EU, and they resented his prediction at the weekend that more members would follow the U.K. out of the union.
Just as importantly, Trump’s campaign promises to impose tariffs on companies selling into the U.S., and to negotiate lower drug prices with major pharma companies, have already started to hit the share prices of European companies. Germany’s automakers all lost between 1.5% and 2% after Trump threatened BMW (bmwyy) with a border tax on cars made at its new plant in Mexico last week. And the President’s claim that drug companies are “getting away with murder” has also hit the share prices of companies like France’s Sanofi (snynf) and Danish insulin maker Novo Nordisk (nvo).
The U.S.’s trade deficit with the EU hit a new record high of $155 billion in 2015 and is likely to have fallen only by a whisker in 2016, having reached $134 billion by November. For context, that’s twice the size of the country’s deficit with Mexico ($59 billion), but less than half of the deficit with China ($320 billion) in the first 11 months of last year.
Malmström admitted that there was – for the foreseeable future – little hope for the Transatlantic Trade and Investment Partnership, a deal launched by President Barack Obama to help U.S. digital and service-based companies crack an EU market that’s still tightly protected.
“The election of Donald Trump seems likely to put our EU-U.S. negotiations firmly in the freezer, at least for a while,” she said.
Malmström glossed over the visceral resistance to TTIP in much of Europe, notably Germany, due to concerns about data privacy and the scope for private companies to sue national governments in independent tribunals.