On the 25th of July 2018, It looks like the republican President Donald Trump is claiming success in pulling back from the brink of an all out trade-war with the (EU) European Union.

Earlier in the day, President Trump had hosted the European Commission President Jean-Claude Junker at the White House were it seems that both worked out a “deal” on trade where Europe has agreed to purchase more soybeans and natural gas from the US and in exchange, the US president has agreed to put a halt to implementing additional tariffs. The deal is weak on substance. The reality is, this deal resembles the one he did with N Korea in June 2018, only this time, there are a lot of relieved US farmers and folks working on Wall Street.

And so now, President Trump can claim victory over a problem that was totally, one of his creation with his base. This action reflects quite a switch in President Trump’s thinking from just the previous day when he was tweeting “tariffs are the greatest.”

What could possibly have encouraged President Trump to become a little less stupid when it comes to the tariffs, that he has been so intent on imposing. There is that possibility that the polling numbers published on July 25th could have contributed to his more nuanced attitude towards his tariffs.

As per a 7/25/18 NBC news report, Polls: Trump approval sags in trio of Midwest states by Mark Murray:

In three politically important Midwest states — including two that were key in deciding the 2016 election — President Donald Trump’s job approval rating is below 40 percent, and Democrats hold a sizable lead for the upcoming congressional midterms, according to a trio of new NBC News/Marist polls.

In Michigan, which Trump won by nearly 11,000 votes, 36 percent of registered voters approve of the president’s job, while 54 percent disapprove.

And in Minnesota, which Trump narrowly lost by 1.5 percentage points, his rating stands at 38 percent approve, 51 percent disapprove.

On July 25,2018, Mark Landler and Ana Swanson of the New York Times penned the following report, “U.S. and Europe Outline Deal to Ease Trade Feud”

Excerpts:

“The United States and the European Union stepped back from the brink of a trade war on Wednesday, after President Trump said the Europeans agreed to work toward lower tariffs and other trade barriers, and to buy billions of dollars of American soybeans and natural gas.”

“The surprise announcement, made by Mr. Trump and the president of the European Commission, Jean-Claude Juncker, defused, for the moment, a trade battle that began with Mr. Trump’s tariffs on steel and aluminum exports and threatened to escalate to automobiles.”

 

“We’re starting the negotiation right now, but we know very much where it’s going,” Mr. Trump said, standing next to Mr. Juncker at a hastily scheduled appearance in the White House Rose Garden.”

“Mr. Juncker said, “I had the intention to make a deal today, and we have made a deal today.”

“The two sides, he said, had agreed to hold off on further tariffs, and work toward dropping the existing ones on steel and aluminum, while they tried to work out a deal to eliminate tariffs, non-tariff barriers and subsidies on industrial goods, excluding autos.”

“It was hard to say, given Mr. Trump’s bluster and unpredictable negotiating style, if the agreement was a genuine truce or merely a lull in a conflict that could flare up again. Twice, Mr. Trump’s aides have negotiated potential deals with China, only to have him reject them and impose further tariffs. Cutting these trade barriers to zero would be an extraordinarily complex political challenge on both sides of the Atlantic.”

“And Mr. Trump stepped back from punitive tariff threats for some relatively minor European concessions: the purchase of soybeans to make up for a steep falloff of buying by China, and the promise to purchase liquefied natural gas once the United States builds more export terminals, which are far away. For weeks, the president has portrayed the European Union as fleecing America with unfair trade, but he put away his saber as farm state Republicans were begging for relief.”

“I think it’s helpful that they made some progress today with the European Union, and I think we really emphasized that we need to keep the momentum up and get the deals as soon as we can,” said Senator John Hoeven, Republican of North Dakota, who was at the White House for the announcement.”

“Europe’s pledge to buy more natural gas gives Mr. Trump a talking point with Russia, after he vowed to compete for orders in Europe, where Russia is the largest supplier. The lack of natural gas terminals, though, means that this windfall is years in the future.”

“Still, Mr. Trump called it “a new phase in the relationship between the United States and the European Union,” a striking change in tone from his recent trip to Europe, when he referred to the European Union as a “foe” and criticized its most important member, Germany, for its dependence on Russian gas.”

“The two leaders made the announcement before more than a dozen Republican lawmakers, who had expressed growing alarm at the president’s protectionist actions, which they said were harming farmers. Republicans said they were summoned to the White House believing they were there to negotiate. Then they were ushered into the Rose Garden for the announcement.”

“We arrived there and then we became eye candy on the set,” said Senator Pat Roberts, Republican of Kansas, who was singled out by the president for his farm advocacy.”

“For his part, Mr. Trump had expressed irritation with the Republican resistance.”

“When you have people snipping at your heels during a negotiation,” he said on Twitter, “it will only take longer to make a deal, and the deal will never be as good as it could have been with unity. Negotiations are going really well, be cool. The end result will be worth it!”

“The Trump administration has already imposed billions of dollars of tariffs on the European Union for what it has labeled unfair trade practices, raising costs for companies and consumers and roiling a traditionally close alliance. Mr. Trump’s threat to go after automobiles particularly rattled the Germans, who export millions of BMWs and Mercedes-Benzes to the United States but also produce millions at American factories.”

“Mr. Juncker was dispatched to Washington this week along with other European officials as part of a last-ditch effort to halt those tariffs. A former prime minister of Luxembourg known for his informal manner and occasional gaffes, Mr. Juncker has forged a good rapport with Mr. Trump, and the two men appeared at ease on Wednesday.”

“Disaster avoided,” said Bart Oosterveld, the director of the global business and economics program at the Atlantic Council. “Earlier today, our highest hopes were for a truce, and this is kind of like a truce.”

“Fred Bergsten, senior fellow and director emeritus of the Peterson Institute for International Economics, said an agreement with Europe would allow Mr. Trump to focus on China. But he said that the deal seemed to have an “eerie similarity” to one with China this year, shortly before Treasury Secretary Steven Mnuchin announced that the trade war was “on hold.”

“We have seen something like this movie on the other major trade front only a couple of months ago, and I would just hope that it would not play out in the same way, which at the moment seems to be a stalemate with China,” Mr. Bergsten said.

But Republicans were happy to declare victory.

“There’s an emotional uplift, because this is the first big breakthrough,” said Representative K. Michael Conaway, Republican of Texas and the chairman of the House Agriculture Committee, who was at the event. He added that it “demonstrates the president believes he’s on the right track, and it’s hard to argue that he’s not.”

“Mr. Trump did not promise to remove the tariffs on shipments of steel and aluminum coming from Europe, and the Europeans did not promise to lift their retaliatory tariffs. But he said that the tariff issues would “get resolved as part of what we’re doing.”

“In May, the United States began levying tariffs on roughly $7.7 billion of steel and aluminum exported from the European Union, which goaded the Europeans into imposing taxes of their own on $3.3 billion of American products and challenging the United States at the World Trade Organization.”

Mr. Juncker had called the American tariffs and the cycle of retaliation they had invoked “basically a stupid process,” saying the Europeans would now be forced to respond in kind.”

“We will now impose tariffs on motorcycles, Harley-Davidson, on bluejeans, Levi’s, on bourbon. We can also do stupid,” he added.”

Link: Trade Disputes – The New York Times