What's Trump's Real Trade Target: China or Europe?

Do Trump's endless trade volleys and sanctions have a clear target? Consider the possibility it's the EU, not China.

Out of the blue, and with open rebuke form Democrats and Republicans, Trump reversed sanctions on China.

This was peculiar in and of itself, but his rationale raised more than a few eyebrows.

All of a sudden. Trump is concerned about "too many jobs lost in China"!

One can rationalize this is about Rotting Cherries, Spoiled Pork, and Car Inspections, but could it be there is more than meets the eye?

Iran Sanctions

China is “already the winner,’’ said Dina Esfandiary, a fellow at the Centre for Science and Security Studies at King’s College in London, and co-author of the forthcoming ‘Triple Axis: Iran’s Relations With Russia and China’.

Turning East

EU Disharmony

5,000 German Corporations Hit By Trump Policy

One can rationalize this all away, but a translation from Spiegel Online underscores the key idea: Trump's Policies Hit Nearly 5,000 German Companies.

Sanctions on Europe. Not Iran

Eurointelligence fills in some blanks.

Over the last three days it gradually dawned on the Germans that Donald Trump's sanctions against Iran are in reality sanctions against Europe, and Germany in particular. The combination of third-party sanctions and changes to US tax laws has led to a situation where a large number of German companies now have an overwhelming interest to shift their business to the US, according to Spiegel Online.

FAZ notes that the helplessness of the German government is becoming increasingly evident, both economically and politically. The paper notes that even Angela Merkel is casting doubt on whether it is possible to maintain the Iran nuclear agreement after Trump's decision.

Goodbye Europe

The cover of Der Spiegel this week this week, "Goodbye Europe" says it all.

Intent or Collateral Damage?

China responded to Trump tariffs by inspecting fruit to the point it rotted, pork until it spoiled, and Ford autos in such a manner that it required disassembly. Trump changed tactics.

It's easy to make a case that the only thing Trump understands is force.

It's also possible Trump is totally clueless and he is ruled only by spur of the moment decisions.

Finally, one can make a case that Trump's true intent all along was to bust up EU solidarity and everything else is just a sideshow.

It's easy to make that case even though Occam's Razor suggests the alternatives are more likely.

Regardless, the EU's roll over and play dead response to the sanctions is a sure loser for the EU and a sure winner for China.

Ball in Play

EU, the ball is in your court.

Last week Merkel stated it's time for “Europe to take its destiny into its own hands.”

OK - Do it!

Staring at the ball as it rolls over you does not win points.

Mike "Mish" Shedlock

Comments
No. 1-10
LouisM
LouisM

I have absolutely no sympathy for trade with the EU, particularly Sweden, Belgium, Netherlands, Britain, France, Germany. Trade with Europe has been biased in favor of Europe since WWII. First it was biased in favor of Europe to rebuild after WWII. Second it was biased in favor of Europe to bribe socialist and cultural Marxist Europeans to remain allied with the US during the Cold War. Third, the trade bias favoring Europe remained on autopilot so US could retain hegemony and global leadership. Meanwhile as the US technological lead slowly evaporated to Europe and Asia....as manufacturing and services jobs in the US slowly evaporated to Europe, Asia, Canada and Mexico....China built up its military...Europe built up a Soviet Style Socialist/Cultural Marxist Central Planning politburo regulating everything from the economy to speech...and while everyday Europeans suffered Europe imported millions of unassimilable hoards of muslims who are incapable of working and will be living off the European govt for generations. This is all happening because the US financed a bubble of exaggerated power in China and a bubble of exaggerated utopian central planning govt in Europe. We (US) gave them our jobs and technology while the US lived off cheap imports, increasing debt, increasing poverty, increasing immigration, decreasing middle class and rising cultural Marxist/Marxist leftist rot. Its time for closing our (US) borders to immigration, increasing tariffs until trade is fair, reconstructing our educational system away from tenured incompetent leftists and rebuilding our infrastructure....and letting China and Europe face the bubbles they created. The only sanity in Europe can be found in the VISEGRAD and Austria. When the western European bubble collapses then western Europe will look a lot more like the VISEGRAD. Native Europeans will get jobs and Africans/muslims will be deported. The sooner China's bubble collapses the sooner war will be avoided in Asia. I have no desire to maintain the status quo bias in favor of Europe or China but because of alliances and markets...it must be a slow deflation of the bubble.

Blacklisted
Blacklisted

Maybe, Trump knows how to negotiate with thugs and socialists better than the ivory tower bureaucrats of the past who got us in this mess.

caradoc-again
caradoc-again

The EU would have become stronger with Iran, now it will find another way not enabled/disabled by the US at will. I have no idea what is right/wrong here as I wouldn't trust any of them as far as I could kick them.

caradoc-again
caradoc-again

EU is collateral damage. They were biggest beneficiaries outside of Iran. US gained little imho. The consequences will be more EU to create a unified army etc, and possibly a pivot to Russia. Russian natural resources plus German industrial might would be bad for US and China. The EU is seriously p!seed off and there are groups looking to exploit that to achieve more EU integration and weaken US influence.

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