Says Antonio Bonet, president of the Club of Spanish Exporters and Investors. He points out that “Europe has a single tariff applied by all member states, but the U.S. applies a tariff to each country, meaning it can decide that the tariff applied to Spanish black olives is higher than that for Italian olives, as it did at one point. So there is a part of the negotiation between Europe and the U.S., and another bilateral part for each country, which has to go underneath. This makes it a complex negotiation in which Spain has leverage to avoid being mistreated.”
News broadcasts open with the increase in tariffs that Trump wants to impose on European products; what they don’t mention is that a car manufactured in Vigo has a 2.5% tariff in the U.S., while a car made in Detroit sold here has a 10.5% tariff.
That doesn’t only happen with cars; it happens with other things as well. In sports footwear, for example, we apply a 6.5% and they apply a 3.5%… The issue is also how Trump presents his proposals, in a rather unacceptable way. The reality is that what Trump did in his first term was not reversed by Biden, and everyone criticized Trump while no one said anything to Biden. Moreover, many protectionist policies against the criteria of the World Trade Organization have been implemented by Biden, such as the investment subsidies contained in the Inflation Reduction Act. So the issue of presentation is important. Then there’s the fact that Trump is very much against the so-called woke agenda, which means that the entire European left, which is very woke, is against him.
The U.S. trade deficit is indeed a reality.
Trump’s advisors are not fools; there must be very valuable people there, and a tariff increase in the U.S., like in any other country, causes inflation. One of the reasons that all polls attribute to Trump’s victory has been inflation. Is he going to implement inflationary policies? That doesn’t seem to make much sense.
So?
In our opinion, we need to approach negotiations with the U.S. on completely different terms than those currently being proposed: if you impose tariffs on me, I will impose more on you. Perhaps we need to propose a different negotiation: Do you think we are treating you unfairly? Well, let’s negotiate and see if I can lower the tariffs for you, because how many American cars are we going to import from the U.S. even if we lower the tariffs? In other words, a positive negotiation. For example, the previous European Commission approved an ‘anti-coercion’ package that enables the Union to implement very strong retaliatory measures, not just tariffs, such as imposing barriers to the trade of services, even if it is liberalized, to public procurement from foreign companies, and even restricting intellectual property rights. This is a package from 2023 that can be used. But that means entering into a war, a war that no one is interested in, neither them nor us. Because we do not want a war that will clearly harm us.
No one appeals to the World Trade Organization; is it dead?
It is moribund, it doesn’t work. There is a fundamental problem, and that is that in the WTO, each country has one vote, and unanimity is required. So reaching an agreement is almost impossible. The system was to hold negotiating rounds, like Doha, Montevideo… But it has been a long time since there has been any round because it is impossible to reach any kind of agreement. And in practice, there was one thing that worked very well, which was the Appellate Body: when a country violated the rules and another country felt harmed, it could go to the Court, and if it was ruled in their favor, they were enabled to impose sanctions on the violator. But that doesn’t work, and it doesn’t work because there is no Court, because the U.S. does not appoint its representatives. Neither Trump nor Biden.
In other words, they have no interest in the Court functioning again.
No, they are going their own way. And the problem is how to change the rules if doing so requires unanimity.
