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“What The Hell?”: Europe Enraged As Biden Trade Policy Risks Maximum Malarkey

“What The Hell?”: Europe Enraged As Biden Trade Policy Risks Maximum Malarkey

As the Biden administration risks European energy security with a ‘pause‘ on LNG exports, US foreign trade policy has allies wondering just ‘what the hell’ is going on.

In short, turns out Biden did not reverse a slew of Trump-era pro-America trade barriers in place, excluded European companies from subsidies designed to help US manufacturers, and poked the panda with restrictions on Chinese access to American technology.

Many Europeans fear that Trump, seemingly en route to the Republican nomination, might abandon Ukraine and the North Atlantic Treaty Organization, as well as inject chaos into global trade. They have nonetheless come to believe that regardless of the winner of the expected Biden-Trump rematch, U.S. economic policies have tilted from their favor. “The honeymoon is over,” one European diplomat said. –Wall Street Journal

Now, European diplomats and officials are wondering if the bloc can even rely on the US to continue backing the rules-based trading system – or if economic conflict that seemed a certainty under Trump is in the cards no matter what.

“We are an old couple, and we have our issues,” said French trade minister, Oliver Brecht, to US trade rep Katherine Tai last month during a visit to Washington. “But we should be careful to manage our trade differences.”

The more things change…

In 2019, the tone at a 70th anniversary NATO party was somber, according to Rep. Brendan Boyle (D-PA), who was present at the London party. Attendees suggested that the alliance might not survive Donald Trump.

“The joke that kept getting repeated, and this was gallows humor, was, ‘Well, let’s enjoy this party because there’s a real question of whether we’ll have a 75th anniversary party,’” said Boyle.

A sigh of relief at Biden’s election has quickly turned to worry, however. Despite the US president cheering NATO’s expansion after Russia’s invasion of Ukraine, NATO members were blindsided by Biden upholding some of Trump’s worldview – casting unfettered global trade as a national-security threat, and warning that the hollowed-out US industrial base has harmed American workers and given China room to expand, dominating several industries.

Very Trumpian, no?

For starters, while Biden virtue signaled by suspending Trump-era tariffs on European steel and aluminum, it wasn’t permanent, and European metal exporters were hit to the tune of hundreds of millions of dollars last year.

European leaders sought repeatedly to persuade Biden to kill the tariffs. In October, Ursula von der Leyen, the president of the European Commission, European Council President Charles Michel and other EU officials arrived in Washington for a summit, where they had hoped to put the issue to bed.

In talks ahead of the summit, U.S. officials had pushed for the EU to impose tariffs on Chinese metals as part of a deal, a step some Europeans worried might violate World Trade Organization rules. The night before the White House meetings, EU diplomats reviewed a proposed joint statement, which was the product of last-minute negotiations between the U.S. and the bloc’s executive arm. After review, some of the diplomats said the statement sounded like the bloc would be willing to back those tariffs as part of an eventual deal. -WSJ

“There was just a barrage of member states going, ‘What the hell?’” said one European diplomat.

European Commission President Ursula von der Leyen speaking at a White House meeting on Oct. 20 last year. Photo: Evan Vucci/Associated Press

Ahead of that October summit, the US tried to temper EU anger over Biden’s Inflation Reduction Act, which showered tax breaks on clean-energy industries in an effort to lure foreign companies to open US-based factories and source local materials. In short, a Trump tactic.

While European leaders of course praised the climate-alarmism, from an economic perspective they were pissed – as the law would undoubtedly disadvantage their own clean-energy rackets, luring investment dollars away from the EU.

“You’re hurting my country,” French President Emmanuel Macron told Sen. Joe Manchin (D-WV) – who wrote much of that law, at a White House dinner a few months after the IRA was signed into law.

Europe has further bristled at conditions for a $7500 US tax credit for buying a new EV which stipulates that the car must be assembled in North America, and that its batteries must include minerals and parts from the US or one of its free-trade partners, in an attempt to weaken China’s grip over the materials industry.

Of note, Europe doesn’t have a free-trade agreement with the US – which Manchin says he didn’t know when he wrote the law.

Early last year, German Chancellor Olaf Scholz complained to Manchin that the U.S. subsidies hurt the German auto industry. Manchin was dismissive. On his phone, he presented a search result to the German leader that showed EU auto tariffs were higher than U.S. levies, according to a person familiar with the exchange. A German government spokesman declined to comment on the content of the conversation. -WSJ

Meanwhile, discussions between the Biden administration and European firms on a new trade deal to help European battery producers has been ‘bogged down,’ according to the report.

They think they’re hot shit?

According to White House climate adviser John Podesta, the naysayers are wrong.

“Yeah, there’s a certain amount of bitching, but I think in reality what it’s done is spurred action,” he said in October.

On Tuesday, US and EU officials will once again meet in Washington – this time for a gathering of the Trade and Technology Council, set up during the Biden administration in order to coordinate on trade, economy, and technology. The agenda includes clean energy and artificial intelligence, however no action is expected according to an EU official.

Tyler Durden
Mon, 01/29/2024 – 20:00