What does it take to get guys like Canadian Foreign Trade Minister Timothy Sargent, his Japanese counterpart Kazuyuki Yamazaki, Mexican Undersecretary for Foreign Trade Juan Carlos Baker and European Union Director General Jean-Luc Demarty to drop everything at very short notice and pack a bag for Switzerland?
Yes, and reps from South Korea and a bunch from the EU? All with little advisers from the car industry?
At the end of July, after he got EU Capo di tutti capi Jean-Claude Drunken Juncker sobered up, Trump tweeted: Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the ‘piggy bank’ that’s being robbed. All will be Great!
The stunned Juncker bowed the head and twittered I came for a deal, we made a deal. The EU continues to stand up for free and fair trade.
And there you are, just short of a fortnight later, they were all sitting round the tables in Geneva.
Trump threatened to impose a 25 percent tariff on cars manufactured outside the EU in August or September and countries in and outside of Europe concerned at the possible impact. The EU was there to tell the others – all outside the EU that the holiday was over for their car manufacturers – “You wanna keep selling Fiats in the US? You wanna sell your Hondas? You gotta drop your tariffs against the US stuff”
And that applies to Mexico where Audi, BMW, Chrysler, Fiat, Fuji, Honda etc etc assemble their stuff and ship across the Rio Grande into the US. 25% tariff would flatten Mexico. And leave a serious change to the bottom line of the car makers.
Well now, what were they talking about? Tariffs? you would think so, but apparently not, not really, well, maybe in passing.
The Mexican Undersecretary said they were there to “exchange views and discuss possible measures”. Yes, and “various topics of free trade”
Deutsche Bank analyst Gaëtan Toulemonde scoffed and said concerns were high surrounding Mr Trump and his threat of tariffs. The tariffs were coming on top of the diesel scandal, Brexit, CO2 targets.
Toyota came straight out and said that the tariffs would add $12,000 to the cost of sale in the US – all 12,000 going into the US Treasury.
But David O’Sullivan EU ambassador to the US remarked that he told National Public Radio that The EU and the U.S. have moved from a negative to a positive feedback loop. We now have a positive dynamic of mutual understanding:
MM’s Acme Officialese Translator (4.99 at Woolies)broke into hysterical laughter and had to be shut down for fear of overheating when the remark was fed in.
So there it is – the EU has buckled badly, and all governments outside the EU will go home with salty tears.
Canada in particular is in dead trouble. They act as a staging place for every imaginable sort of goods from everywhere and ship into the US paying from zero to 2.5%.
And here we were all told that blundering Trump couldn’t win a trade war – nobody could. Everyone would suffer. Why, the cost of tacos alone would infuriate Mexican-American voters.
The EU caved in weeks, the rest will follow suit, and it won’t do China a blind bit of good to sell their pirate copies of American cars. The EU has agreed to regard stuff made from stolen IP as essentially stolen stuff. China can sell them to Bangladesh and maybe Russia but the EU is a market ten times bigger than those.
How true, how true, how true – actions speak louder than words.