The Atlantic Mirror

How Europe is reflecting Trump’s Mercantilism 

President Trump’s 2016 electoral victory in the United States took many by surprise, but much of his success rested on the simplicity of his pitch to the American voter. Before assuming office, he outlined his vision of a new foreign policy, stating:

My foreign policy will always put the interests of the American people and American security above all else. It has to be first. Has to be. That will be the foundation of every single decision that I will make.

Trump’s message was simple: while previous administrations had prioritised international trade and security arrangements that were ostensibly detrimental to the United States and its people, his administration would place their needs first, rectifying perceived injustices and reversing the country’s relative decline in the world today. Although there is little debate that states are, to varying degrees, self-interested actors, what was radical about Trump’s ‘America First’ policy was its overtly aggressive tone and zero-sum view of power relations. This marked a departure from the win-win neoliberal doctrine promoted by Western states and international institutions alike that has dominated the normative structure of international politics since the end of the ideological conflict of the Cold War.

Indeed, this ‘America First’ policy has been central to many of the most high-profile and controversial decisions of the Trump administration. From withdrawing from the Trans-Pacific Partnership of the Paris Agreement on climate change, to trade disputes with Mexico and an ongoing trade war with China, the United States has continually engaged in aggressive behaviour towards other states in the name of defending the interests of the American people. In light of this, critics have wondered whether an increasingly isolationist United States is fit to lead the free world. It seems the US’s new self-interested economic protectionism has undermined for some its role as the standard-bearer for a globalised and integrated neoliberal world order.

The latest of these contentious conflicts is the trade dispute between the two largest aeroplane manufacturers in the world: Airbus and Boeing. The US first filed the legal case against Airbus, which is jointly owned by Germany, France, Spain and Britain’s BAE Systems, in 2006, contesting the $22 billion of subsidies that Europe had given the company. This dispute of over a decade rapidly raised tensions when the World Trade Organisation found the European Union guilty of providing illegal economic assistance to Airbus. On the basis of this ruling, the US threatened the EU with $4 billion in tariffs, and released a list of European products including meats, olives and cheeses, which they intend to target. The EU matched this by compiling a list of American goods worth $22.6 billion to tax should the US make good on its threats.

At first glance, this transatlantic trade dispute appears one of many others initiated by the United States, rooted in Trump’s ‘America First’ policy. Even America’s traditional allies in Europe are subject to US economic aggression. However, to present the EU as a victim of a new American mercantilism is misleading. As the case dates back to 2006, it is clear that the US has long been willing to pursue legal action to protect what it views as its economic interests. Attributing this stance wholly to Trump’s administration is therefore not accurate. Moreover, this dispute reveals that Europe may have more in common with America regarding economic policy than it would like to admit.

It is notable, for instance, that the WTO found both parties guilty of illegal economic activity. While it found the EU guilty of offering illegal subsidies to Airbus, it similarly handed the EU a victory in its counter-case against the US, ruling that America’s favourable contract terms and tax breaks to Boeing had undermined Airbus sales. These rulings shed light on unfair trading practices on both sides of the Atlantic, with the EU and the US illegally intervening to promote the growth and financial success of the two juggernauts of the aviation industry. Moreover, the swiftness of the EU’s proposed tariffs to counter US sanctions, especially in a bloc not known for the speed of its political procedures, demonstrates that Europe is very willing to engage in economic protectionism as America, if it deems it to be within its interests.

The rulings of the WTO reveal that neither the US nor the EU are innocent parties in this trade dispute. America cannot claim the EU is engaging in unfair trading practices when it continues to offer tax breaks to its own companies, and it is difficult for the EU to accuse America of economic protectionism when it exhibits in near identical behaviour. The debate then, is not about who is guilty of illegal activity but how states should react to the illegal activity of others. The Trump administration’s tendency to pursue heavy sanctions for violations may be in accordance with international trade law, but it undeniably has a negative impact on its foreign relations, its strategic alliances and, perhaps, the international status it clearly craves. On the other hand, the EU’s decision to respond in kind shows that Trump’s ‘America First’ policy may no longer be uniquely American. It seems that Europe has internalised a protectionist outlook of its own in response to US aggression, which, perhaps ironically, is highly similar to it.

It is clear that America is not the only country to prioritise its perceived interests to the detriment of others. European states have been doing this for a long time. However, by pursuing harsh sanctions for those it deems to challenge its interests, even its traditional friends and allies, the US is rewriting the rules of international trade. Although Europe may wish to distance itself from the explicitly self-interested rhetoric of the Trump administration, its decision to respond in kind to the US shows a rising protectionist outlook on both sides of the Atlantic with enormous implications for the way trade, and foreign policy more generally, will be conducted in the future. President Trump’s ‘America First’ policy may not place America on top, but it does highlight the immense normative power of the US in constructing a world both more competitive and less forgiving.