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Ben Roback is Head of Trade and International Policy at Cicero Group.

Rarely in the Trump White House is there such thing as a quiet week. Perhaps nothing better sums up the last fortnight that the resignation/firing/ousting of Kirstjen Nielsen, the Secretary for Homeland Security – the nature of her departure depending on whose account you believe.

Per the usual flood of immediate leaks to the press, reports suggest the President tweeted out the news moments before she could announce it formally herself. Nielsen will stay in the role until April 10, but the transition will be made harder after Claire Grady, the Acting Deputy Secretary of Homeland Security, announced she is also to leave the department.

That creates confusion at a time when Donald Trump is taking an even harder line on immigration, seeking to make it the defining issue of not just his re-election campaign but the entire 2020 general election.

When not embroiled in staff turnover, the White House has been devoting more time re-focusing efforts on its trade policy. The President has stuck to campaign promises made around the notion of global trade working against America and harming US jobs.

On that subject, he polls well – an October 2018 CNN/SSRS survey showed the President’s approval rating for handling foreign trade up eight points to 43 per cent. This followed the announcement of a new trade deal with Mexico and Canada, the USMCA. Whilst the White House celebrated a formal signing ceremony as a major victory in November 2018, remember that it requires the legislatures of all three countries to approve the agreement.

Trade policy in Washington is turning increasingly towards the EU and China.

First, the EU. Trump holds deeply sceptical views of the European Union, hence his consistent backing for Brexit both before and after the 2016 referendum. The layers of political bureaucracy and pooling of sovereignty in the name of shared security and prosperity go directly against the President’s ‘America First’ vision of nation-state supremacy.

That will not stop the US pursuing trade talks with the bloc, but prospects for success appear limited.

Europe and the US launched exploratory talks in July 2018 to reduce tariff and non-tariff barriers in the bilateral trade. Last month, after a round of negotiations in Washington Robert Lighthizer, the US Trade Representative, said the United States has reached a “complete stalemate” with the EU over agricultural demands. The impasse looks difficult to overcome given the total disparity in positions.

In short, Lighthizer included a long list of ambitious agriculture goals in January when the United States released its negotiating objectives for the potential trade agreement, whilst Cecilia Malmström, the EU Trade Commissioner, has said the EU will “will not discuss agriculture”. It is unclear how this latest attempt at boosting EU-US trade will suffer a different fate to the doomed TTIP negotiations.

Emmanuel Macron adds a new layer of complexity – which browsers of this site will no doubt be accustomed to reading – having combined his own objections to agricultural provisions with the United States’ decision to withdraw from the Paris Climate Accord. “I am not in favour of having new trade deals, in whatever form, with whoever is, with partners that do not have the same climate standard than we have because that would be unfair competition for our companies, our farmers,” he said.

President Trump also looks in no mood to engage with an open mind, tweeting yesterday in no uncertain terms his anger at EU trade policy. “It will soon stop!” the President said, but with such significant hurdles to overcome it is neither clear when nor how.

Second, China. Last week, the Chinese state-run Xinhua news agency reported the US and China negotiating teams had “achieved new progress” in the ninth round of high-level economic and trade talks. They took place in Washington and were concluded with a meeting between Liu He, China’s Vice Premier, and Trump. The White House was cooler on the progress of talks, stating “significant work remains” but that delegation members would be in “continuous contact to resolve outstanding issues”.

That all points to a far more optimistic outlook compared to EU-US trade. Trump recently went as far as saying there’s a “very good chance” of reaching a trade deal with China, in the midst of a months-long tariff war between the two economic powerhouses.

But much like EU-US talks, no matter the progress made at a technical level, it remains to be seen whether the president’s personal instincts could help or hinder the deal. The Chinese he refers to as “tough negotiators but great friends”, whereas the presidential bromance between Trump and Macron seemed to have fizzled out almost immediately after it began. The prospects for progress between the US and China appear far greater in the immediate future than between the US and EU.

38 comments for: Ben Roback: The White House turns its trading focus to Europe and China

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