Speaking to reporters in the Oval Office on Friday, US President Donald Trump complained that the European Union “has not treated us right.” He said: “We’re losing $181 billion a year. We have been for many years.”
Despite the claim, Trump is still not ready to make a decision about whether to slap tariffs on European cars, a move he has threatened for a year.
“The European Union has not treated us properly but we’ll see what happens with regard to tariffs on cars with the European Union. We haven’t made a decision,” he said.
There is one important reason Trump not only will likely not put tariffs on autos from the EU, but also may be forced to lift tariffs on steel and aluminum from the bloc, Canada and Mexico.
What Trump has hailed as the crowning achievement of his trade policy, the renegotiated North American Free Trade Agreement, is now under threat. And it is not just Democrats in the House of Representatives who are mounting opposition to the deal that has been renamed the US-Mexico-Canada Agreement.
Senate Republicans met with Trump on Thursday to tell him that they won’t give him the votes needed to approve the USMCA unless he drops metals tariffs that have been imposed on allies.
“I don’t think there are going to be 51 votes to pass it with the tariffs still outstanding. So as a practical matter, that’s a reality we’re all going to have to deal with,” said Republican Senator John Cornyn, Politico reported. “I also think the Mexico government and the Canadian government are unlikely to approve the deal with the tariffs still standing,” he added.
“I don’t know how much it matters in the House, but I think it definitely matters for our vote count over here,” said Senate Majority Whip John Thune, who indicated that the tariffs on allies would have to go for the Republicans to support the USMCA.
The trade deal would still face challenges in the House, where Democrats are threatening to hold it up without changes made to the deal. That is an unlikely scenario that would require reopening negotiations with Canada and Mexico.
The US president has already sold the deal as one of his greatest successes as he begins to rev up his campaign for re-election.
Trump also confirmed to reporters on Friday that he will run for re-election on the economy, which continues to produce positive headline numbers for GDP growth and employment. Starting a new front in his global trade conflicts, economists warn, could test the US economies resilience in the face of global headwinds.