President Donald Trump's vision of the future United States-European Union trade relationship is based on bilateral agreements, rather than one agreement for the 28 member states, according to Marianne Schneider-Petsinger, a geoeconomics expert with the London-based think tank Chatham House.
What Happened
Trump's administration has made it clear it wants to establish one-on-one trading relationships with European countries, Schneider-Petsinger said during a Wednesday interview on "Bloomberg Surveillance." This may pose a problem: the EU is solely responsible for setting trade policies and individual companies are only free to privately meet with Trump's trade officials to "explain how EU trade policies are conducted," she said.
Why It's Important
European Commission President Jean-Claude Juncker will be traveling to Washington to meet with the president, but the "big question" is what will be on the agenda, Schneider-Petsinger said. The meeting comes at a time of tension and potential expansion of a trade war. At the same time, the European Union is active in new trade deals with multiple countries, having recently completed an agreement with Japan, Schneider-Petsinger said. Talks are underway between the EU, Australia and New Zealand, she said.
What's Next
No indicators point to the U.S. economy suffering from the early stages of a trade war, Schneider-Petsinger said. A "tipping point" could come if business leaders or Republicans "stand up" against Trump's trade policies, she said; this may be due to the fact that Republican voters are more likely to be "on board with Trump on trade than they are with the traditional free trade Republican model."
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