Macron’s Claims Of Trump Tariff Truce May Be False Dawn Amid Fractious US-EU Relationship

You’d think that, by now, world leaders would know better than to trust anything Donald Trump says about tariffs.

The US president has reneged on promises related to trade on so many occasions over the course of his multi-year, multi-front dispute with all of humanity, that trying to catalogue his reversals would be an exercise in abject futility.

Xi Jinping knows this better than anyone, but Emmanuel Macron is also familiar with just how mercurial Trump can be.

Macron thought he had averted tariffs on French wine and other goods after the August G-7 in Biarritz, but subsequent reports indicated the US was still pursuing a 301 probe into France’s digital services tax, which affects US tech titans including Facebook, Amazon and Google.

At the post-G-7 press conference in August, Macron suggested the dispute had been at least temporarily resolved. “We have reached a very good agreement”, he remarked.

Apparently not. Because less than four months later, in December, the USTR announced the administration’s intention to slap punishing levies on everything from wine to makeup to reptile leather.

Read more: Trump Finds France Guilty In Digital Tax Probe

Given that, you almost feel sorry for Macron when he tweets things like he did on Monday.

“Great discussion with @realDonaldTrump on digital tax”, he said. “We will work together on a good agreement to avoid tariff escalation”.

According to French diplomatic sources, the two sides have agreed not to impose tariffs this year, but the White House doesn’t sound so sure. “[The] two leaders agreed it is important to complete successful negotiations on the digital services tax”, a read out of Trump’s call with Macron says, adding that the two “discussed other bilateral issues”.

That doesn’t sound like a real truce.

French economy minister Bruno Le Maire on Monday told LCI television that he’ll be chatting with the US delegation in Davos in hopes of coming to some kind of agreement. “We are ready to make steps toward the United States, and we have already proposed a certain number of measures”, he remarked. “We hope to reach a resolution by Wednesday”.

Nobody should get their hopes up. Trump’s position on trade with Europe is still wholly ambiguous. The 301 probe the USTR used to justify the threat of tariffs on French products late last year is, of course, the same type of investigation cited in the trade war with China. After missing a deadline to decide on the imposition of auto tariffs under Section 232, the Trump administration was rumored to be considering a separate 301 investigation in order to justify more levies on the Europeans. That would presumably be above and beyond the tariffs on French products in retaliation for the digital tax.

Last summer, Trump recoiled at the notion that anyone other than him should be allowed to tax American tech companies. “France just put a digital tax on our great American technology companies”, he sighed, on July 26. “If anybody taxes them, it should be their home Country”.

In October, tensions between Washington and Brussels ratcheted higher when the WTO green-lighted retaliatory measures against $7.5 billion in EU goods per year in conjunction with the long-running Airbus spat. It was the largest arbitration award in WTO history (and came despite Trump’s repeated claims that the organization is “always f–ing” America).

The USTR promptly announced its intention to tax everything from French wine to cheese to whisky to olives, pork, butter and yogurt.

Europe will likely retaliate next year once a parallel dispute involving Boeing is adjudicated.

Last week, EU trade commissioner Phil Hogan was in Washington, where he chatted about the digital tax and transatlantic trade more generally. While in the US, Hogan blamed Trump’s “America first” mantra for creating “a high-pressure crisis moment for the international trading system”.

“If we go about this in the right way, working together, the mutual benefits can be very significant”, he said Thursday. “But, if we fail to do so, the damage will be significant, not alone for us both, but for the world”.

As if that wasn’t enough, Hogan also suggested that the EU may challenge parts of the “Phase One” trade deal between the US and China at the WTO. “We haven’t analyzed the document in detail, but we will, and if there’s a WTO-compliance issue of course we will take the case”, he told the Washington conference at the Center for Strategic and International Studies. “We’re not trigger-happy about taking cases to the WTO… but we’ll stand up for our own economic interests”.

Trump has gone out of his way to cripple the WTO, which is just another point of contention between the US and its trading partners.

Asked about Trump’s concerns with the US trade deficit, Hogan described the US president as “obsessed”.

That obsession was on full display Sunday, when Trump spoke to a group of farmers in Austin. “If [Europe’s trade barriers] don’t come down, we’re going to have to do things that are very bad for them”.

Read more: Trump Paralyzed The WTO’s Appellate Body. Then He Filed An Appeal.