President Donald Trump on Wednesday agreed to ease tensions with European trading partners, telling European Commission President Jean-Claude Juncker that he’d ease off the automobile tariffs if European partners agreed to buy more U.S. soybeans and liquefied natural gas.
“Soybeans is a big deal. And the European Union is going to start, almost immediately, to buy a lot of soybeans,” said the president, according to Reuters.
Just how enforceable Wednesday’s agreement was remains in question, as is the bottom line of what Trump actually got in the deal versus what he gave up.
What’s clear, though, is that the announcement was made at a crucial time.
This easing of tensions comes just in time for President Trump’s tour of a number of Midwest states (starting with Iowa and Illinois on Thursday) where his approval ratings have drooped, as rural voters there have absorbed the first shots in his trade wars.
In a bid to win farmers over, the White House announced a $12 billion subsidy package that fell totally flat with farmers, who insisted they wanted “trade not aid” and called the aid package a bandage that “only slows the bleeding.”
President Trump did not address any of this in his tweets, characterizing the meeting as one between two allies who “love each other” — a dramatic shift from his statement on July 15 wherein he described the European Union as a “foe” in an interview with CBS.
Obviously the European Union, as represented by @JunckerEU and the United States, as represented by yours truly, love each other! pic.twitter.com/42ImacgCN0
— Donald J. Trump (@realDonaldTrump) July 25, 2018
That interview came after the president tore into European partners twice in the space of roughly a month: First, at the G7 summit in June, where he reportedly threw candies at German Chancellor Angela Merkel and said, “Don’t say I never give you anything,” and then, at the NATO summit earlier this month, where he lambasted European partners for not spending enough on security.
At the G7, he also threatened the E.U., saying it had to remove tariffs on U.S. goods. At the same time, the president defended U.S. tariffs on European goods, saying, essentially, that it’s high time Europe stopped using the U.S. as a “piggybank” that is continuously robs.
He also targeted Merkel again, this time for the natural gas deal Germany signed with Russia, a country against which Trump said the U.S. was protecting Europe. Ignoring the fact that Russian natural gas is far cheaper for Europe to import than U.S. natural gas, the president said the deal “can’t be explained.”
If President Trump saw Russia as a threat, he did not betray a trace of that when he met with Russian President Vladimir Putin in Helsinki just days later, where he struck a far too collegial tone with the former KGB spy.
It’s unclear how much liquefied national gas Europe is willing to purchase from the United States. Russia offers gas at a competitive price and has the infrastructure and presence to dominate the market there.
How the E.U. can sell the idea of paying more for less in energy in exchange for the lifting of automotive tariffs remains to be seen.
Regardless, the trade war with Europe is not over.
European Union tariffs on steel and aluminum remain in place, and tariff wars with China (which has been cancelling purchases of U.S soybeans), Mexico, and Canada are also still raging on.
It’s also worth noting that while the president will no doubt trumpet the deal as a boon for soybean farmers, China was the biggest customer for American soybeans: Sales to China amount to roughly $14 billion a year for U.S. farmers.
The U.S.’s trade partners have called Trump’s agenda protectionist and have largely, thus far, balked at his demands that they accept U.S. tariffs on their goods, while being expected not to respond in kind.