"Trump always chickens out." The phrase, coined by a columnist at the Financial Times, has been circulating widely in recent weeks. The idea that the US president speaks loudly but does not always follow through on his threats has fueled complacency among stock markets regarding the risks his trade war poses to the global economy. However, accusations of cowardice may not apply to Donald Trump alone. The European Union's hesitance in the face of Trump's maneuvering has also raised questions about whether the 27 member states can truly engage in the kind of power struggle that is now essential.
While Brussels believed it was on track to minimize the tariffs on European exports to the United States, Trump dashed the EU's hopes by announcing on July 12 that he would unilaterally impose a 30% tax starting August 1. Is this a final bluff to extract further concessions, or a definitive move that could deal a severe blow to European growth? In any case, as the American president ramps up the pressure, the EU continues to waver, trying to salvage what it still can.
European leaders have responded with lackluster retaliatory measures that have done little to deter Trump, who seems indifferent to the economic consequences of his actions. This game of high-stakes bluffing is likely to benefit the party setting the rules, to the detriment of those who are forced to adapt, always a step behind and uncertain of the game's true objective.
The confrontation appears to be based on a misunderstanding. The EU seeks to negotiate in good faith, aiming for fair trade based on the principle of comparative advantage between countries. But the US president has little interest in this quest for a mutually beneficial, purely commercial agreement. His ambitions go further. He aims to undermine Europe by any means, because he despises everything it stands for: supranationalism, multilateralism, progressivism and the primacy of law. Yet the EU has no reason to apologize for what it represents, nor to make concessions on its tax policy or the regulatory framework it has established for digital services.
In this final stretch of negotiations, Europe must give the talks a political dimension, moving beyond the technical aspects that have dominated the debate so far. The EU should clearly set out its red lines and aim high. Settling for a compromise as unfavorable as the one the United Kingdom accepted in May would be unacceptable. If the 27 member states, as the US's top trading partner, fail to demonstrate that they carry more weight than a single country, it would send a disastrous message about the purpose of the European project.
The EU's strategy of absorbing American provocations without actually implementing the retaliatory measures at its disposal has shown its limitations. The "proportionate, robust, and well-calibrated" reprisals promoted by the 27 member states do not measure up to what is a clear act of aggression, one whose aim goes beyond simply rebalancing the US trade deficit – its goal is to subordinate Europe. If Europe were to "chicken out," the consequences would not be purely economic.
Translation of an original article published in French on lemonde.fr; the publisher may only be liable for the French version.