The legendary (alleged) statement by the famous American diplomat Henry Kissinger about the one phone number he should dial when he wants to talk to Europe is more relevant than ever in the past. Who should Trump negotiate with when he wants to reach an agreement with the EU on tariffs? With Ursula von der Leyen? Although she is the President of the European Commission, she plays a much lower role in the EU than French President Emmanuel Macron or German Chancellor Friedrich Merz. However, they do not have a mandate. Should Trump negotiate with Trade Commissioner Maroš Šefčovič?
And this also applies to defense. Who plays first violin in European defense? France has nuclear potential, but outside the NATO structure. Great Britain is already outside the EU and is partially dependent on the US for its nuclear arsenal. Or is it the most powerful European country, Germany?
That's why Trump is setting the pace: he sets the agenda and pushes the US point of view. The volume of trade between the US and the EU was 1.68 trillion euros last year. Trump is right that his country has a deficit with the EU - 157 billion dollars last year. And he only wants to achieve a"draw". So far, so good, but the ruler of the White House somehow forgets to add that this applies to goods and that the Americans have a surplus of 109 billion dollars in services. Trump accuses Europe of introducing various unfair barriers on certain products. But can the EU back down on standards in food, cosmetics or agricultural products? Concessions in these areas were the subject of intensive, top-secret negotiations in 2015 within the framework of TTIP, a free trade area between the US and the EU. In 2016, Trump"threw TTIP in the trash".
This is Europe's problem. Although there have been several warnings and proposals for solutions, our leaders are interested in everything but the essentials (lack of innovation, fragmented capital markets, high energy prices): a lot of ideology, little pragmatism.
When it comes to services, Trump rejects any taxation of giant technology companies. They pay taxes either in the US or in tax havens: more precisely, they pay symbolically. But since they do business in European countries, they should pay proper taxes. If taxation at the global level was agreed upon at the OECD, Trump recently stopped it. If the US president does not withdraw from the 30% tariffs, the union will have no choice but to"light up" technology companies. Will the leaders have the courage?
What will the citizens say? We all use Microsoft (Windows, Office), Apple, Google, Meta (Facebook), most recently OpenAI, we shop on Amazon and we have fun on Netflix. If these largest world corporations (indirectly) include new taxes or duties in their prices, will Europeans be willing to pay extra? But that is not the worst thing. The stumbling block lies entirely elsewhere. In Europe, France, Germany, Italy, Britain or anywhere else, there is no large technology corporation that offers similar competitive services. And what state-of-the-art technology products does the EU offer? The US is falling far behind the EU in terms of economic performance: in 2010, the GDP of both blocs was roughly at the same level, now the EU is only 2/3 of the performance of the US.
This is Europe's problem. Although there have been several warnings and proposals for solutions, our leaders are interested in everything but the essentials (lack of innovation, fragmented capital markets, high energy prices): a lot of ideology, little pragmatism. Overly ambitious environmental goals and the breakneck paths to them are economically devastating the union, and competitors are rapidly escaping it.
This is why Trump can afford to be tough and harsh on Europe, why Putin ignores it, why China has caught up and overtaken it. We should finally come to our senses. It is questionable whether a divided Europe is capable of this.
