March 16, 2018

Europe Isn’t Playing the Trade War Game Right

Richard Sennott/Minneapolis Star Tribune/ZUMAPRESS

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Europe is making a list and checking it twice:

The European Union Friday made public a 10-page list of American products that are potential targets for retaliation if President Trump refuses to exempt the allied bloc from his new tariffs on steel and aluminum imports. The list offered the most detailed glimpse to date of the likely targets for E.U. action, including products selected for maximum political impact in the United States. Among them: Bourbon, a specialty of Senate Majority Leader Mitch McConnell’s Kentucky; cranberries which grow in House Speaker Paul D. Ryan’s native Wisconsin; orange juice from Florida and tobacco from North Carolina, two political swing states that are rich in electoral votes.

I think the EU is being too clever by half. Do they seriously think that Paul Ryan and Mitch McConnell are going to respond to tariffs that affect a tiny chunk of their electorate—especially when the EU has made it clear they they’re doing this deliberately to put pressure on them? I doubt it. And anyway, it’s Donald Trump they need to hurt, not legislators who are already mostly free traders.

If the EU wants to play this game, they need to play it the same way Trump does: big and simple. Just pick a large export category for the US—chemicals, maybe, or wood pulp or optical instruments—and slap a 20 percent tariff on it. Then make up some kind of transparently bogus justification and stick to it like glue. There’s really nothing else that will get Trump’s attention. You have to hit him over the head with the fact that (a) this is retaliation and (b) it won’t stop.

Keep it simple. Trump is not notable for his sense of nuance.

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