They tried their best but with an unpredictable US President, nothing is certain. In turn, President Macron of France and German Chancellor Angela Merkel came to and went from Washington but the assessment of many is that President Trump was not moved either by an over extravagant show of affection from the French President or a more cooler and focused argument approach from Chancellor Merkel.
Key issues such as the US-EU trade imbalances and the looming Iran sanctions waiver have been left in the balance. At a joint press conference at the White House with the German Chancellor, President Trump was even less diplomatic and bemoaned America’s $151 billion trade deficit with the European Union, whose exemption from steel and aluminium tariffs expires unless the US grants an extension.
Merkel lamely suggested that little progress had been made on the issue and that in the final analysis President Trump will decide, cool analytical counter arguments or not. To soften the blow, the American President laid the blame on the current trade imbalances on his predecessors and went further by reiterating his criticism of NATO members that do not spend the mandatory 2 percent of GDP on defense.
Again, Merkel had to defend herself by saying that Germany’s latest budget would take defense spending to 1.3 percent of GDP. World leaders and close American allies have now to take more seriously President Trump’s threat that allies have to now assume a far greater share of military and other nation building costs that the United States finds itself embroiled in, either as a peace keeper or as an active military participant.
Concerning Iran, the German Chancellor did not seem to have much luck too like President Macron. On her first visit to Washington since her close re -election, the Chancellor acknowledged that the Iran JOCPA deal is “anything but perfect – it will not solve all the problems with Iran”, but she described it as a building block but again conceded that Trump must decide whether the US would withdraw.
At least President Trump better received Angela Merkel this time as when Merkel last visited, Trump was criticized for not shaking her hand in the Oval Office. This time, he greeted Merkel outside the West Wing with a handshake and a kiss on each cheek but these pale by comparison compared with the effusive kisses that President Macron received.
World leaders and close American allies now have to take more seriously President Trump’s threat that allies have to now assume a far greater share of military and other nation building costsDr. Mohamed Ramady
Trans-Atlantic trade war
All this has left the European Union’s leaders in a quandary and left the EU to warn about the costs of a trans-Atlantic trade war while bracing for one to erupt after the US signalled it will reject the bloc’s demand for an unconditional waiver from metals-import tariffs. Donald Trump’s administration is asking Europe, Canada and other allies to accept quotas in exchange for an exemption from steel and aluminium tariffs that kick in May 1, when a temporary waiver expires.
This puts the EU in the difficult position of either succumbing to US demands that could breach international commerce rules or face punitive tariffs. But the EU’s resentment is also based on the fact that despite the effusive statements of love, friendship and admiration to the visiting European dignitaries, the US has not afforded them the same permanent waivers like other US trading partners.
The White House last month temporarily shielded some trading partners including the EU from the duties, at 25 percent for imported steel and 10 percent for aluminum on the grounds of protecting national security. The president ordered US Trade Representative Robert Lighthizer to negotiate with countries seeking permanent exemptions.
The EU is demanding a permanent, unconditional waiver from the US tariffs. So far, South Korea is the only nation to be spared from the duties, after reaching a deal to revise its bilateral free-trade agreement with the US To avoid the steel tariff, South Korea agreed to limit US shipments of the metal to about 2.7 million tons a year.
In a halfhearted response, the EU seems to be hitting back as President Emmanuel Macron said this month: “We won’t talk about anything while there’s a gun pointed at our head.” Mrs Merkel seems to be more pragmatic about any final outcome and who will win in the end.
Her words at the joint press conference in Washington are apt in her assessment of how things had developed with President Trump. “We spoke about the state of negotiations and our respective assessments. The decision lies with the president.” They certainly, came, saw but President Trump conquered in the end.
Dr. Mohamed Ramady is an energy economist and geo-political expert on the GCC and former Professor at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia and co author of ‘OPEC in a Post Shale world – where to next?’ His latest book is on ‘Saudi Aramco 2030: Post IPO challenges’.