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Europe is afraid of consequences

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The US Midterms have given the Republicans the loss of the House of Representatives and thus a damper – that US President Donald Trump therefore deviates from his „America First“ policy, is still considered excluded. On the contrary, in Europe, concerns are about a resumption of the commercial dispute. The auto industry could again target Washington.
Especially in the economic sector Trump „must prove to his constituents that he can deliver,“ said Fabian Zuleeg, chief economist of the European Policy Center (EPC) in Brussels, to „This has to do with the feeling that those workers who have benefited less from globalization must be defended against what Trump calls unfair practices.“ So there will be little change in the US president’s agenda, Zuleeg said , „He will continue to try to score points in domestic politics by acting strongly towards trade partners.“

This does not only affect China, with which the US is conducting an open trade war. Also against Europe Trump announced in the election campaign: „The European Union was formed to take advantage of us in the trade,“ he said in a television interview. „Nobody treats us much worse than the European Union.“

Trade agreement not in sight

Trump has a special grudge against Germany. „Trump deeply believes in his heart that the EU, and especially the Germans, wants to trick the US,“ US foreign policy specialist Jeremy Shapiro of the European Council on Foreign Relations told Reuters. A thorn in the side of the US president is the US trade deficit vis-à-vis the EU. Trump had threatened with US tariffs on import cars from Europe.

Setback or success for Trump?

In the summer, European Commission chief Jean-Claude Juncker managed to prevent their introduction during a visit to the White House. Between Brussels and Washington, the dismantling of all import duties and trade barriers for industrial goods except cars was agreed. The negotiations over it, however, came to a halt. US Trade Minister Wilbur Ross called on the EU in mid-October to increase the pace of negotiations. The talks are not intended as a five-year process, Ross said.

EU Trade Commissioner Cecilia Malmström accused the American side of showing little interest in an agreement. As for the threatened US tariffs on European cars, everything is still open. Economics Minister Margarete Schramböck (ÖVP) stressed after the EU Foreign Trade Council on Friday, the Austrian Presidency will „make pace“ in the talks with the United States. The goal is to have „a clear and strong negotiating mandate in hand“ by the beginning of next year. Malmström was also confident. She will travel to Washington for talks next week.
„Trump remains Trump“

Certain layers of voters believe Trump’s protectionism is well received, said Christoph Leitl, President of the European Economic Chamber Eurochambres. As long as Trump is president, he will care little about the Senate and the House of Representatives, Leitl told Already Trump makes excessive use of his powers as president. „Trump will always be Trump. He does not need to tighten anything, because you can not tighten much more on this line anyway, „said the former long-standing President of the Austrian Federal Economic Chamber (WKÖ).

Automotive suppliers in the sights of Washington?

In Brussels and the automotive industry, meanwhile, according to a report by the magazine „Politico“ the fear is that Trump wants to „poach“ in the European auto supply industry. Once again Germany could be miserable. Many German auto companies operate factories in the US and Mexico. The parts for production continue to come mainly from Europe.

That could soon change: Representatives of the European Commission and the auto industry expect, according to Politico „, that Washington plans to introduce a point system to regulate the distribution of import quotas. Such a system is already enshrined in the US-Mexico-Canada Agreement (USMCA), the successor to the North American Free Trade Agreement (NAFTA).

Preferred are manufacturers that not only have the vehicles assembled in the US, but also produce the parts on the spot or purchase from domestic companies. The obvious goal of the USMCA is to move production as far as possible to the USA.

A spokeswoman for the German Association of the Automotive Industry also voiced concerns to the magazine. The considerations are „worrying“.
Programmed conflicts

Foreign policy expert Shapiro also assumes that Trump will „seek confrontation“ on an international level as soon as he encounters greater domestic opposition. Tensions between Democrats and Republicans are programmed, even if the Grand Old Party could even expand its majority in the Senate at the Midterms.

In the House of Representatives, Democrats can block the implementation of some of Trump’s most important campaign pledges – such as a renewed tightening of immigration laws, financing the planned wall on the Mexican border, or further cuts in the healthcare system. Will Trump must maintain his course, he must govern by decree (executive order). A first conflict was already evident the day after the Midterms, when Trump warned the Democrats against initiating further investigations against him and his government with their newly won majority.