The trade war between the United States and China can be an opportunity for Europe – if it can be up to the challenge. And there is something very satisfactory to see the opponent score a goal in his own goal.
Admittedly, Europeans will impoverish due to the trade war triggered by Donald Trump. But those responsible politicians on this side of the Atlantic are also looking at the positive side of the situation.
In economic terms, the world is divided into three blocks that compete with each other: United States, China EA Europe.
But the US president’s decision to attack the whole world through a trade war – with a special punishment reserved for number one enemy, China – offers one.
“We have someone who marks goals against the goal itselfand that someone is Donald Trump, ”he said François Villeroy de Galhaugovernor of Banco de França, in a recent interview at.
Now, the question is to know how to take advantage That, writes Carlo Martuscellijournalist specializing in Economics and Finance of the EU, in an analysis published in.
But first of all, there is still a lot of land to recover.
Europe came out of COVID in poor conditionwith an average growth less than half of the United States. THE Germanythe first economy of the old continent, underwent a wave of closing of factories and steel, and the German car builders succumbed to the weight of an energy shock triggered by the invasion of Ukraine by Russia.
In theory, the unique EU market allows companies to easily access the surroundings 450 million consumers European Union; In practice, it remains fragmented and its policy elaboration is heavy and rigid.
But Donald Trump’s arrival in the White House, in particular the commercial measures of the “” April 2 – which introduced new customs rates that vary between 10% and 49% In almost every country in the world (and in the meantime they were suspended) – it may have begun to change the scenario.
Nonetheless, the euro valued 10% Regarding the dollar this year, with investors exchanging the US currency for more stable alternatives.
Even more impressive are the Public Debt Movements negotiable, called “obligations” in financial jargon.
Usually considered a safe investment in times of instability, the American debt was Sold in mass by traders in the followed panic to announce Trump’s customs rights, leading to an increase in loan costs to the federal government. In search of security, investors turned to European obligations.
“With all energy that is being used to undermine the role of the dollar and US government titles as safe assets, the euro received a new impulseso To be accepted on the international scenario ”, observes Davide Onegliadirector of European and global macroeconomics of a consulting firm in economic forecasts.
Recent IMF forecasts reduced growth prospects from the United States to 2025 andm 0.9 percentage points Due to new tariffs – the biggest drop among all major economies except Mexico.
IMF forecasts for China were reduced by 0.6 points, while estimated eurozone comes out relatively unharmedwith only one overhaul of 0.2 percentage points.
The last will be the first
The president of the European Commission, Ursula von der Leyenstarted last year proclaiming loudly and sound a. Although the expression is vague-it refers to the economy and growth, as well as the position of Europe compared to its competitors-it is seen as a right choice.
While the 27 EU countries have faced difficulties in the last decade, the US produced new technology giants at a rhythm that Europe can only dream of – thanks to a Magic Combination of Three Ingredients: Functional financial markets, state -of -the -art university research institutions and well -stuffed consumers.
To China, For a long time the world’s misery workshopbegan to dominate the cutting -edge industry in the fields of clean energy, electric vehicles and robotics, thanks to its industrial policy.
And although all this is still true, the decisions made in April – with Washington and Beijing to apply mutual tariffs that exceed 100% – Leave the Europe in a privileged position.
American customs rights on European imports, although higher than before, are far from the reached levelss between the United States and China.
These commercial tensions arise at a time when the economy of the Empire of Middle is controlled of its real estate sector and tries to make a painful rebalancing in favor of higher domestic consumption rather than exports.
“A prolonged trade war between the United States and China could open new markets for European companies,” he says Ludovic Suttor-Soreldirector of European Macro Policy Network, a group of Think Tanks.
China already depends on European products In categories such as chemicals and transportation equipment, and this will probably increase. American demand for some European industrial goods that previously bought to China – as machinery, plastics and textiles – It could increase, he said.
The Trump administration implied that it expects to reach an agreement with Beijing to reduce the level of customs rights.
But, however, Transpacific trade has fallenproviding shortage of the supermarket shelves. And the constant goes and go diplomatic, with Chinese employees to deny that the conversations are even happening, Long -term credibility underminedregardless of what happens.
There is also the rest of the world that, thanks to the leadership of the United States, has adhered to the free trade as a source of prosperity “And today you see your biggest defender turn his back.”
A Europa You just have to take the role.
This is a point that did not escape the chairman of the commission, who, in recent to the politician, without mentioning names, criticized the chaos that reigns in the Trump administration.
“In an increasingly unpredictable global environment, Countries queue To work with us, ”said Ursula von der Leyen.
Take advantage of the crisis
But much depends on Europe’s ability to continue to freely market with the rest of the world, the economist points out Paul de Grauwe. “If we can, the USA will be an isolated protectionist bastionwhich will cause efficiency problems and high prices for industrial products. ”
“In general, What happens in a crisis is that it creates opportunities“, He argues from Grauwe.“ If we detect it sufficiently and act in timely, we can transform the crisis into something that in the end will have favorable effects“.
Os Free trade agreements are difficult. Negotiations for the trade agreement Mercosur Between Europe and South America began in 1999 and only in December a political agreement was signed. The European Union is also in negotiations with Indiathat CE intends to conclude by the end of the year.
They exist Other possibilitiesmore subtle.
O US dollar also benefits from world currency status in fact. Central banks have it in their reserves and world trade-even between two non-American parts-is often made in dollars.
This situation gives the United States a great influence geopolitics, reduces its financing costs and allows US consumers to have access to cheap international products.
Some important members of the Trump administration question whether the special dollar status It will be such a good thing – For a number of very complex reasons related to how the dollar affects the quota of the national transforming industry.
It is not known to what extent Trump himself is aware or worried with this question. What is certain is that The dollar seemed to falter the next day on April 2.
And the euro is an obvious alternative.
“The world faces a crisis of confidence in the dollar, while Liberation Day repercussions continue to feel,” wrote Deutsche Bank chief economist, David Folkenti -landin a note addressed to the bank’s customers.
In the text, Folkerts-Landau describes Trump’s customs tariffs as “ greater shock for the financial system and commercialL world ”since 1971, when the world has definitely abandoned the gold standard.
The time of the euro
The EU, despite its ineffectiveness, continues to respect the rule of law – Something that, according to critics, is less and less true in the US, where accelerated deportations for and attempts to dismiss leaders of previously independent government agencies.
And, unlike China, The EU allows the free circulation of capital Inside and outside its borders, a previous condition for the widespread acceptance of its currency. Investors want vast and open savings to use their currencies, do business and locate their investments.
Until now, No one believes the euro will completely replace the dollar. Your participation in worldwide currency reservations It remained stable, turned 20%since its release in 1999.
But, according to Nicolas VéronFrom Think Tank Bruegel, recent events made people think. “If trust in the dollar collapsesWhere will people go? The euro is in the foreground if we put this question. ”
If the euro gets conquer at least part of the quota from market to the dollar, you can reduce companies financing costs European, which would be particularly beneficial for the start-up sector.
That too would give Europe more weight at a time when geopolitical competition intensifies.
There is Many things that can go wrong. There is no doubt that customs rights will harm European growth.
If Trump pushes the world economy for a recession, there is always the risk of investors seek refuge in its traditional safe valuethe American assets, instead of in Europe. This is what happened during the 2007 financial crisis, although the collapse occurred in the American mortgage market.
Quasi -advantages that Europe may want to enjoy also depend on the Brussels’ ability to throw their cards well. Washington will certainly try intimidating Europe to cut ties with China and alienate to the United States, which would eliminate any commercial advantage.
Finally, a broader acceptance of the euro It can be a two -edged knifeas the supporters of Trump state. Certainly would reinforce the currencywhat would impair exports At a time when Germany, whose economy is focused on exports, is already in trouble.
But compared to the beginning of von der Leyen’s second term last year, The competition now seems a little less unbalanced. And in a good football game, There is something very satisfactory in seeing the opponent mark a goal in the goal itself.
