July 27, 2018


How Juncker got the better of Trump (Michael Burleigh, 27 JULY 2018, UnHerd)

He acts the same way with foreign governments, thinking that if he acts tough, they will come crawling to Washington. They will make concessions and the world will revert to normal, on Trump's terms. This is how Juncker's visit was billed. Unfortunately that is not how things work.

Plants which close do not reopen, and the Mid-Continental Nail Corporation in Missouri, Amercia's largest nail manufacturer, is a useful example. It imports its metal from Mexico and has been hit hard by the tariffs. It could shut. If it reopens, it will be in Mexico.

Firms with complex supply chains will establish them elsewhere, and the new suppliers will not gladly relinquish this new business. Nor will Latin American farmers who capture the corn and soybean market in China after US produce has been turned away. Moreover, countries will find permanent work-arounds. The Japanese salvaged the Trans-Pacific Partnership after Trump rejected it. Australian, Canadian and New Zealand farmers now have an advantage in the Japanese market, as do European wine producers and car-makers after the EU-Japan trade deal was completed. Things do not revert to normal after all.

Mr Juncker is a smarter man than many of the Eurosceptic herd in this country credit. So many Brexiters I know, who cannot be readily separated from the wine bottle, make snide comments about 'Druncker'. But the sharp operator arrived with a framed photo of the cemetery in Luxembourg where General Patton is buried, for the President. It was inscribed with the words: "Dear Donald, let's remember our common history".

He had also decided to entirely separate defence and trade, and to pursue the German approach of superficial accommodation rather than the French desire for confrontation. While Malmström dangled vague zero tariffs on all motor vehicles at perplexed Republican Congressmen, Juncker offered to buy more US soybeans and LNG, provided Trump suspended current hostilities. Juncker knows perfectly well that European consumers don't like US cars, and that they are suspicious of GM and hormone saturated foods.

Trump felt the love, and declared a truce, perhaps after realising that he needs allies for the bigger showdown with China. So more pointless noise, more anxiety for American workers and their bosses, and, as in the case of the President's sensational gambits with Kim or Putin, a pathetic climb down, this time to a genially steely former prime minister of Luxembourg, who deserves his cognac on the flight home.

Posted by at July 27, 2018 5:19 PM