While the EU is blistering as they attempt to retaliate against Trump’s steel and aluminum tariffs, they are now attempting to target peanut butter and orange juice. But the trade war isn’t simply the US vs the EU, it is also the EU against the UK! However, the commodities their economic experts target is rather odd; Brazil accounts for 50% of all global orange juice. US production is in a downward spiral, has been for years, exasperated recently by Florida crops destroyed by Hurricane Irma and – exports are “flat”. Which means the tariff on orange juice is worth $0.00.
US peanut butter export partners include Canada, Mexico, Europe and Japan. The European consumers are concentrated in The Netherlands, the UK, Germany and Spain. Unlike other European countries, The Netherlands top export partners include the UK and the US with Germany being the number one destination. In 2016, Spain’s highest trade surplus partner was the UK at $8.2 billion, an increase of 3,014%.
The EU has already initiated a trade war with the UK using BREXIT as blackmail. However, in their tit-for-tat plundering, it would appear they haven’t considered the consequences to countries in the EU other than Germany and France. Given they are the fundamental leaders of the EU decision making schematic, they don’t appear to be making wise choices.
Currently, the UK’s largest trading partner is the EU, with the US coming in a close second. If the EU cuts off the UK and imposes tariffs, the US is calmly waiting in the shadows ready to pick up any slack. While the EU already slaps a 10% tariff on the import of US automobiles, by contrast, German automobiles are charged an import duty of just 2.5%. The hypocrisy of the German government and by default the EU Commission is beyond comprehension.
It would seem that the EU and Germany are playing a game of chicken without realizing their engine is out of gas.
In 2016, 54% of UK imports came from within EU countries. If the EU hardlines trade, the UK will slowly shift partners. Currently the largest trade partners include: Germany, Spain and The Netherlands (the same countries that like all the US peanut butter…weird).
While the EU has been considered an ‘emerging superpower’ over the last decade, its share of the global economy has been steadily declining. Add to the fray the growing welfare as a result of refugee and immigration policies, the demand that the EU fund their own military, and Economic policy decisions now seem to be playing a game of chicken without a car…
And the media is at the wheel.
The EU Commission has grown into a Fat Walrus with a budget closing in on $160 billion Euro’s and most assuredly rising. Taxing, penalizing, overseeing, demanding, and fining seem to be their role. Air pollution is a problem in the EU and despite targets being established in 2005 and 2010, 23 of 28 countries don’t meet the goals. It’s a joke.
Sanctions on member states not meeting ‘refugee quotas’ was another EU brainchild that has backfired.
And yet, we continue to forget the sage fairy tale that recounts the race between the tortoise and the hare. While the EU Commission has stated that a) this has been in the air for some time, and b) they will retaliate, and c) they will take this to the WTO, retaliation is not a defense recognized by most courts…
The US trade deficit in goods is $811 billion, with the largest categories being commercial aircraft, automobiles, and food. The largest deficits were earned with China, Japan, Mexico and Germany. Germany imports autos, aircraft and pharmaceuticals, while it exports autos, industrial machinery and medicine. China charges a 25% tariff on US imports of automobiles.
For the Democrats and the GOP to gasp at the horror of equalizing tariffs, they would seem to have ulterior motives that don’t include the prosperity of the US. Most recently, Trump announced that his goal was to create just that – a direct constant equalizing of all tariffs – thereby eliminating ‘inequality’ – the same catch-all phrase employed by Democrats about – everything Democrat…
But after all the hrumphing and blubbering and demanding, it looks as though the EU, Japan and Australia are begging for their own exemptions. Bottom line? Trump is looking to close the trade deficits – China, Japan and Germany – it is now your call.