Trump Shows Merkel and Macron That Europe's Clout Is Dwindling

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(Bloomberg) -- Europe’s preeminent leaders gave it their best shot this week. All signs are it didn’t work.

France’s Emmanuel Macron and Germany’s Angela Merkel made their separate ways to Washington with a joint mission: to persuade President Donald Trump to stay in the Iran nuclear accord and grant the European Union a reprieve from U.S. tariffs on steel and aluminum.

Instead, Macron ended up improvising a new Iran initiative, and Merkel left the White House saying the decision on preventing a trade war was out of her hands. “The president will decide, that’s clear,” Merkel told reporters alongside Trump at the White House on Friday.

It was widely predicted that neither Macron’s personal rapport with Trump nor Merkel’s more businesslike approach would sway him on policy -- after all, the American president’s positions on both Iran and trade are popular with his political base. But the combined failure of the French president and the German chancellor underscored how little influence they have with Trump.

The meetings laid bare the chasm across the Atlantic since Trump took office. Merkel was queried about her declaration last year in a Munich beer tent that reliable partnerships forged after World War II were “to some extent over.” She signaled that the close relationship with the U.S. was changing.

“Germany and Europe will take more of its destiny into its own hands, because it’s no longer the Cold War era,” she said on Friday.

The German leader’s two-hour working lunch at the White House on Friday began with a cordial exchange; Trump lauded Merkel as an “extraordinary woman.” It was a contrast to her first awkward trip to Trump’s Oval Office in March 2017, when the president appeared to avoid shaking her hand.

But the meeting was overshadowed by fading hopes that Merkel would be able to move the U.S. president on trade and the Iranian nuclear accord.

Low Expectations

Her meeting capped a week of diplomacy that included a state dinner for Macron, who made a display of back-slapping affection to open a channel to the American leader.

Merkel, accustomed to being feted in the U.S. capital under Trump’s two predecessors, didn’t receive the same pomp and circumstance. But she aimed to make the European Union’s closing arguments. Unlike Macron, she is confronted by a list of specific Trump grievances, including Germany’s yawning trade surplus with the U.S. and defense spending that falls well short of commitments under NATO.

Merkel’s team had prepared for a difficult meeting. Before the visit, German officials said she saw little chance of stopping the tariffs Trump wants to impose on imports of European aluminum and steel on May 1, even as Macron and EU officials suggest he may relent.

While “expectations in Paris and Berlin are really low” for a breakthrough on either the Iran deal or averting the steel and aluminum tariffs, both leaders felt the effort was still important to take, according to Constanze Stelzenmüller, a fellow at the Brookings Institution.

“I think at this point a sense of realism has set in on both sides, and a determination to do whatever is possible to keep the relationship afloat because the stakes are so big,” she said.

Keeping the U.S. in the Iran nuclear agreement reached during the Obama administration has been a priority for Merkel and European leaders with the approach of a May 12 deadline for Trump to continue to waive American sanctions that were lifted as part of the deal.

Trump has long signaled his displeasure with the pact, saying it offered relief to the Islamic Republic without addressing the country’s ballistic missile program or its support for groups the U.S. considers to be terrorist organizations.

‘Risky Situation’

Macron outlined a plan that would keep the original Iran agreement intact while pushing for additional elements, including an extended freeze on Iranian nuclear development and triggers in response to other destabilizing actions by Tehran.

An exemption to the steel tariffs is crucial for Germany, which exports far more finished steel products to the U.S. than any other European nation. An initial exemption granted to the EU from the tariffs is set to expire Monday night, and Trump has steadfastly insisted he wants other economic or security concessions from countries seeking a permanent waiver.

Europe has threatened to retaliate against the tariffs by imposing its own duties on American goods from politically significant areas of the U.S., including Harley Davidson motorcycles from Wisconsin, the home state of House Speaker Paul Ryan, and bourbon from Kentucky, the home state of Senate Majority Leader Mitch McConnell.

The U.S. action would place a 25 percent tariff on steel products and 10 percent tax on imported aluminum. Europe’s plan would impose 25 percent tariffs on $3.4 billion in various U.S. exports.

Jeffrey Rathke, deputy director of the Europe Program at Center for Strategic and International Studies, said Merkel and Macron were “trying to make the best of what is intrinsically an unpleasant and risky situation.”

“They’ve learned that you can’t win if you don’t play, but also they need to take a long-term view,” said Rathke, a former U.S. diplomat who served in Europe. “Even if they are unhappy with a direction the U.S. takes on tariffs, they have every reason to want to explain the consequences and try to contain whatever damage might ensue, and they can explain that to their publics with their heads held high.”

©2018 Bloomberg L.P.

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