The EU Is Playing Trump Just Like It Played the Brexiters

(Bloomberg Opinion) -- The Trump administration has pulled out all the stops to attack the European Union. Realizing its relative weakness, the EU hasn’t tried a muscular response. Instead, it has used the same tactic as it did with Britain’s Brexiters.

On Tuesday, the U.S. ambassador to the EU, Gordon Sondland, accused Europe of disregarding all the goodwill built up since the Marshall Plan and of frustrating U.S. efforts to redress the trade imbalance.

“What we have done for Europe since the end of World War II speaks for itself — and a lot of it was selfless,” he said in an interview with Politico. “It doesn’t count when it comes to asking the EU to cut us a little slack and shift some of the benefit across the table to us.”

Unless the EU gives ground, he warned, the U.S. will use the “multitude of tools available to the president and to the U.S. trade representative beyond just tariffs on cars to make it more difficult for Europe to sell its products to America.”

Sondland’s angry remarks followed a speech by Secretary of State Michael Pompeo in Brussels on Dec. 4, in which he too made references to the U.S.’s role in postwar Europe. “We won the Cold War,” he said. “We reunited Germany.” He then went on to attack multilateral organizations, including the EU. 

“Europe is America’s single largest trading partner, and we benefit enormously from your success,” he said. “But Brexit — if nothing else — was a political wake-up call. Is the EU ensuring that the interests of countries and their citizens are placed before those of bureaucrats here in Brussels?”

He added:

Our mission is to reassert our sovereignty, reform the liberal international order, and we want our friends to help us and to exert their sovereignty as well. We aspire to make the international order serve our citizens — not to control them. America intends to lead — now and always.

With this rhetoric, administration officials are making no friends in the European establishment, which, it’s easy to forget, is largely intact despite the electoral successes of nationalist forces in a number of countries. There are few takers in Europe for Trump leadership outside Poland and, possibly, Italy.

The U.S. pronouncements don’t just irk the Brussels bureaucrats, but also deep-seated, powerful forces in Europe’s biggest economies. In Germany, for example, not only Chancellor Angela Merkel, but also Friedrich Merz, who narrowly lost the race to succeed her as party leader, has argued for European resistance to Trump.

There’s little appetite for a strong pushback, though. European leaders talk about setting up an EU army to reduce their strategic dependence on the U.S., but their actual moves in that direction have been limited. Federica Mogherini, the EU’s top foreign policy official, promises that the EU’s mechanism to allow non-dollar trade with Iran and so bypass U.S. sanctions will be in place by the end of the year — but the negotiations have dragged on, with no country apparently willing to play host to her creation.

Just as Sonderland suggested, the EU and its member states are happy to sit on their hands as Europe’s trade surplus with the U.S. keeps growing. It averaged $12.1 billion a month in the first 10 months of 2017 and $13.9 billion over the same period this year.

The EU has less military and political clout than the U.S., something that is unlikely to change. It is, however, the world’s biggest economy and a trading power on a par with the U.S. in China, but with better-balanced trade flows; it doesn’t have a gaping deficit like the U.S. or a bumper surplus like China. That gives it an inherent advantage in any trade-related negotiation, something the Brexiters are learning the hard way now after months of misplaced self-confidence. They have been unable to negotiate an exit deal they liked with the EU because the bloc was far bigger and better able to absorb any potential shocks.

Even if the U.S. is a far bigger economy than the U.K., the Trump administration, already waging a trade war with China, can’t really afford a fight on two fronts. That would threaten growth, and the last thing the president needs before the 2020 election is an economic downturn. China therefore provides cover for the Europeans to play their favorite game — the waiting one.

What Sondland is seeing, and interpreting as a refusal to give him the time of day, is exactly what the Brexiters saw in their negotiations with the EU: a position based on lots of rules and regulations European officials can cite from memory because it’s their daily bread.

The EU is good at this game and able to play it from positions of both weakness and strength. Few in Brussels, Berlin and Paris feel that any Marshall Plan debts are payable to Trump. Besides, he won’t be in office forever.

Waiting for him to exit the stage may not be particularly farsighted. But the EU is used to taking things as they come. U.S. officials shouldn’t underestimate it.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is a Bloomberg Opinion columnist covering European politics and business. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

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