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Juncker Might Have Just Taught Trump the Real Art of the Deal

Juncker Might Have Just Taught Trump the Real Art of the Deal
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Thursday, 26 July 2018 08:48 AM Current | Bio | Archive

Trump – Juncker meeting

To paraphrase President George W. Bush’s assessment of President Trump’s inauguration address, what he called “some weird stuff,” the meeting between President Trump and Jean-Claude Juncker, President of the European Commission let to a statement, at least in my view, which is just plain “weird.”

Tariffs (taxes) on autos are not mentioned in the formal statement, however markets are assuming that President Trump has completely surrendered on this point and the US consumer will not be subject to additional tariffs (taxes) on European autos.

We will have to wait and see if markets have it right this time around.

President Trump also tweeted: “European Union representatives told me that they would start buying soybeans from our great farmers immediately. Also, they will be buying vast amounts of LNG! 8:07 PM - 25 Jul 2018”

Maybe, President Trump is getting muddled again. European Union officials cannot do that.

The United States is the largest exporter of soybeans to the European Union already. The European Union does not subsidize, impose trade taxes on or have quotas on soybeans. The EU has nothing to do with the purchase of soybeans. Private EU businesses may choose to buy more US soybeans according to market forces. If they do, it will not be because of anything that happened in the White House yesterday.

Private EU businesses may also buy fewer U.S. soybeans of course.

The White House statement also reads: “The European Union wants to import more liquefied natural gas — LNG — from the United States, and they’re going to be a very, very big buyer. We’re going to make it much easier for them, but they’re going to be a massive buyer of LNG, so they’ll be able to diversify their energy supply, which they want very much to do. And we have plenty of it.”

It is a fact that various EU states have had the desire to diversify energy supplies for quite some time. The European Union has little or nothing to do with that.

The statement had the desire to go to zero tariffs and zero non-tariff barriers for trade, except, ‘weirdly,’ for autos, which was explicitly excluded from this.

The White House statement reads: “This is why we agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.”

In fact, this is the Transatlantic Trade and Investment Partnership (TTIP) trading position that the European Union was negotiating with President Obama.

So, where we will go from here, only time can tell.

Economists have always said that no one wins a trade war. The fact that the US is not raising tariffs (taxes) on autos is to be applauded and the US consumer wins as a result of that.

What’s really weird is that the US auto tariff (tax) was reversed in exchange for nothing that means anything. Perhaps EU President Juncker should write a book on the art of deal making.

Besides all that and as President Trump seems to be in the mood to concede over trade, it is worth noting that NAFTA talks resume today again.

Qualcomm - NXP

Qualcomm Inc. has scrapped its $44 billion bid for rival chipmaker NXP Semiconductors NV after China failed to approve the industry’s largest-ever deal before a final deadline.

The takeover may be the highest profile victim yet of the trade spat between China and the U.S., with every other jurisdiction in the world clearing the bid months ago. Qualcomm formally walked away after Chinese regulators didn’t approve the deal by a deadline of midnight in New York yesterday, July 25.

China said the deal has nothing to do with trade tensions.

ECB meeting

Today, ECB President Mario Draghi and Vice-President Luis de Guindos will explain the Governing Council's monetary policy decisions and answer questions from journalists at the press conference that follows.

The ECB has taken out all of the fun of European Central Bank policy, and to be honest, there wasn’t there that much fun in the first place.

By laying out exactly what they intend to do for the next 12 months, the element of surprise has disappeared.

Six years to the day since his historic pledge to do ‘whatever it takes’ to keep the euro together, ECB President Mario Draghi is likely to confirm that the currency bloc is back to good health, which is of course a good thing.

Etienne "Hans" Parisis is a bank economist who has advised investors on financial markets and international investments.
 

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HansParisis
What’s really weird is that the US auto tariff (tax) was reversed in exchange for nothing that means anything. Perhaps EU President Juncker should write a book on the art of deal making.
trump, juncker, meeting, investors, ecb
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2018-48-26
Thursday, 26 July 2018 08:48 AM
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