No. of Recommendations: 7
Meloni most certainly can cut side deals with the US. The EU does not buy weapons as a bloc, for example. Or sell individual things. Or sets national policy for each country.True, but it does set all tariffs as a block. And all other trade policy - all of the terms under which "individual things" are imported and exported. And the EU VAT code, and the Common Agricultural Policy, and nearly all of the non-trade barriers that the U.S. would want to negotiate. All of that stuff is set by the European Commission, not individual countries. Almost everything important to trade negotiations is in the hands of the EU, not the individual countries.
Meloni - and Italy - are almost entirely irrelevant to these issues. Trump's going to have to negotiate with von der Leyen and Trade Commissioner Maroš Šefčovič. He's the EU trade chief, and he's the one who will be cutting any actual trade deals with the U.S. -
not individual country PM's. Early efforts to have those discussions with him before the tariffs were imposed failed utterly because the U.S. could not articulate what it wanted:
https://www.politico.eu/article/trump-team-not-eng...About that - which President collected more in tariffs: Joe Biden or Trump? Would a theoretical President AOC govern the same way? Nobody's attempted
this kind of tariff and trade policy since the days of Hawley-Smoot. I think many folks in Trump's base don't appreciate just how far out of standard even the 10% baseline tariff is for a modern country. The U.S.' general overall weighted tariff for all goods before Trump's proposal was about 1.45%, so we've nearly 10x that on just the baseline tariff
even before getting into the product tariff increases or the "reciprocal" tariffs. To put that in perspective, the highest overall weighted tariff of any developed country on earth was South Korea's 4.85% average tariff - the EU is about 1.39%.
That's how far we've gone beyond anything 'normal.'
https://en.wikipedia.org/wiki/List_of_countries_by...Plus, you might be surprised how fast some companies are shifting production assembly to say, Vietnam to avoid tariffs. That’s a switch that’s been happening for a long time…Not fast enough to materially affect things in six months, though. That's how long they have. Less, actually. Black Friday is November 28th. Which means goods that are going to be distributed to U.S. stores for Black Friday have to be leaving Chinese ports about 30 days prior. Which means all the manufacturers and importers and distributors and retailers have to have everything lined up for the goods to be moved well before October 28th. That might be enough time to accelerate or expand some plans already in place, but not enough to move the needle. Plus, keep in mind that Trump idiotically decided to launch this trade war against all the countries of the world all at once. So the possible alternative countries like Vietnam and Cambodia are
also staring down the barrel of announced tariffs of nearly 50%, which also approach near-embargo levels. Firms can't assume that they'll be able to move to those markets to avoid tariffs. And no, the fact that one or more of them might have an agreement in principle with the U.S. in the coming months doesn't help with that - Trump has shown an unwillingness to honor even the trade pacts he's signed and have been ratified by Congress (hi, Canada and Mexico!), and certainly can't be relied upon to honor the less-formal 'handshake' deals that might be in place between now and Christmas.
Who would that be? Why do you believe that Europe is somehow going to absorb what the United States spent on Chinese goods? They can’t.Not all of it, no. China will definitely bear loss of export markets. But the EU (and other countries) definitely can absorb
some of China's export markets, especially if they start getting a nice price on those goods. The EU has as big an economy as the U.S. (bigger, in some respects), and can definitely take advantage of a bargain if Chinese goods start going on sale on global markets. Chinese exports to the U.S. are "only" about 15% of total Chinese exports. They won't be able to place all 15% with other countries, but they can certainly find a home for maybe four or five points worth.
That still leaves a 10% drop in exports. But again, Xi can solve that problem with money. The same mechanism that Trump is using to solve his domestic political problem with farmers. Just pay them off to get them through the temporary market conditions being caused by the tariff policy. Xi can solve his domestic political problem fairly easily that way. Trump cannot - he doesn't have a button he can push to re-fill store shelves.
