On Wednesday, President Donald Trump will meet with Jean-Claude Juncker, the president of the European Commission, at the White House.
It’s likely to be a tense encounter, as Trump is threatening to levy huge new tariffs on European cars. The U.S. has already slapped tariffs on European steel and aluminum, and the EU has reciprocated with tariffs on $3 billion worth of American exports, such as whiskey and motorcycles.
Here’s what you need to know about today’s showdown.
Jean-Claude Who?
Juncker heads up the European Union’s executive body. Remember that the EU trades as a bloc, so the European Commission takes the lead here—even if the U.S. has been trying to divide the united European front by appealing directly to German automakers for a deal that might ward off tariffs.
The Commission president prepared for his D.C. visit by coordinating on strategy with key EU leaders: Germany’s Angela Merkel, France’s Emmanuel Macron, the Netherlands’ Mark Rutte, and Austria’s Sebastian Kurz.
Juncker is no pushover. He warned against Trump’s trade war before it started, saying it would not be good for the U.S. And the EU has just signed an enormous free trade deal with Japan—an occasion where both counterparts weren’t shy to tout their agreement as a riposte to American protectionism.
At last month’s tumultuous G7 summit, Trump told Juncker he was “a brutal killer,” Juncker recounted afterwards, noting that he was unsure whether to take Trump’s words as a compliment. After all, Trump seems to get along just fine with the likes of Russia’s Vladimir Putin and the Philippines’ Rodrigo Duterte, both of whom might be fairly described in this way.
What other signals has Trump been giving?
Somewhat surprisingly, the U.S. president recently characterized the EU as a “foe”—and the country’s top foe at that.
Trump has been taking every opportunity to argue that the EU treats the U.S. unfairly on trade, whether the subject is the auto industry or Google’s $5 billion antitrust fine.
And let’s not forget Trump’s obsession with European military spending. He says EU countries, which make up the bulk of NATO’s membership, have to spend a greater proportion of their GDPs on defense. He has also called into question NATO’s core premise—that an attack on one is an attack on all—by suggesting that the U.S. may not go to war for Montenegro, the alliance’s newest member.
Trump has also been actively trying to rip the EU apart. He’s an enthusiastic backer of Brexit, and he even suggested to Macron that France would get better trade terms from the U.S. if it left the bloc.
So what do the two sides want?
Here’s what Cecilia Malmström, the EU trade commissioner who is in Washington with Juncker, said in a speech last week:
“We want to find solutions to de-escalate the present situation and prevent it from worsening. We hope we can find ways of working together again to advance a positive, mutually beneficial trade agenda. In short, we want to create additional opportunities for trade and investment. This would benefit both sides of the Atlantic.”
According to Politico, Juncker has two particular proposals: a “plurilateral” deal also involving Japan and South Korea, that would see the world’s major car manufacturers trade without tariffs; and a “limited free trade agreement between the United States and the EU focused only on industrial tariffs.”
On Tuesday night, Trump set out his pitch, tweeting that both sides should drop all tariffs, barriers and subsidies, but that the EU wouldn’t agree to that. At the same time, Trump announced $12 billion in emergency aid for U.S. farmers stung by the impact of his tariffs and overseas retaliation.
The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready – but they won’t!
— Donald J. Trump (@realDonaldTrump) July 25, 2018
The likelihood of the EU abandoning its various subsidies, which arguably glue the bloc together, is indeed vanishingly small. When the EU earlier this year proposed cuts in the massive system of farming subsidies known as the Common Agricultural Policy, the French were apoplectic.
European countries are also utterly devoted to one of the biggest barriers in EU-U.S. trade: geographical indications. Greece would never countenance a trade deal that lets Americans produce feta cheese and call it feta, the French feel the same about Roquefort and cognac, the Spanish about Rioja, and so on.
