President Donald Trump scored a “major win” on Wednesday by reaching a limited trade deal with the European Union, which made a “major concession” to the United States to avoid a trade war. …
Amidst recent tariffs and tensions, European Commission President Jean-Claude Juncker arrived at the White House with two options for a deal to avoid a wider trade war, according to ABC News: “eliminate tariffs on cars for all trading partners or create a limited free trade agreement between the U.S. and EU on industrial goods.”
Trump opted for the latter — and secured Europe’s agreement to buy more American soybeans and liquified natural gas (LNG). The two also announced that they would begin “to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods,” in Trump’s words.
The Europeans have blinked, and are now coming on board for freer trade.
It’s worth noting that the EU started as the EEC, a mercantile trading block of six European countries designed to keep out certain imports and promote their own exports. For instance, it paid their farmers huge subsidies while preventing import of much cheaper food from elsewhere in the world. The EU has always been a major impediment to free trade.
Trump’s trade activities are aimed at freer trade — he says he wants to eliminate all tariffs and trade barriers. But like a strike at an unreasonable and unfair company that blocks dispute resolution by other means, putting up tariffs hurts in the short term in the hope of a better long term agreement. Looks like it might work.