Wednesday, July 25, 2018

EU, U.S. agree on no tariffs or subsidies

The European Union leaders and United States President Donald Trump have agreed to work towards eliminating all tariffs and subsidies on manufactured goods.

That leaves out automobiles and agriculture, which is a highly-protected European sector with intense and sometimes violent lobbying by France’s farmers.

But the Europeans did agree to buy more U.S. soybeans.

This agreement sets the stage for detailed negotiations and is a huge victory for Trump who has insisted that his bullying tariff tactics will lead to trade-rules changes that improve exports for the United States.

The two sides also agreed to work towards reform of the World Trade Organization which Trump has complained is unfair to the U.S.

This agreement leaves Trump to deal with China, the North American Free Trade Agreement and the Trans-Pacific Partnership.

As part of the agreement with the European Union, Trump has agreed to cancel tariffs on their steel and aluminum.

But those tariffs, and retaliatory tariffs by the affected nations, remain in effect against Canada, Mexico, China. and Asian member countries in the Trans-Pacific Partnership.

If tariffs and subsidies can, indeed, be eliminated, it will be a huge gain for international trade. If it could extend to agriculture and food, it would position Canada and the U.S. to ramp up production and exports.