00:00Look, with tariffs rising again and talks continuing in Paris,
00:03are we entering a new phase of permanent trade friction between the US and the EU?
00:08Well, I think we can certainly expect this to continue for the next two and a half years
00:13while Trump is in power, because what has happened, I mean, to be fair,
00:19on this occasion the US have a slight point.
00:20What has happened is that they did negotiate a deal
00:22and the Europeans have not, in fact, implemented it as yet.
00:27But equally, the reason that the Europeans have not implemented this
00:30is they don't trust President Trump to stick to his word either.
00:33So, you know, if you like, neither side trusts each other.
00:37That's not a good basis for stability in the trade world
00:40or for knowing what your tariffs will be in the next day, really.
00:45You talk about the US maybe having a little bit of a point.
00:49Is this still about negotiating better deals
00:51or has trade policy just become a tool for political pressure on both sides?
00:56Well, trade policy always was a little bit of a tool for political pressure.
01:01Clearly, in the hands of President Trump, that becomes ever more so.
01:04So he wants to get his way.
01:06He is succeeding, by the way, in reducing the amount of imports from the EU of goods,
01:12if not necessarily in producing them in the US.
01:16But at the same time, this is a huge trade relationship
01:19and both sides do need the other.
01:22So they also need to consider trade.
01:24So if you like, you've got different negotiations within the same structure,
01:30some parts political, some parts trade,
01:32and you're going to get a messy situation, I'm afraid.
01:35You say this is just how the world works.
01:38But how much economic damage are these tariff cycles already doing to businesses
01:42who are trying to plan long term?
01:45Well, we can't even see the damage.
01:47We have seen that goods trade involving the US has gone down.
01:51I think it will take us a little while to see the effects of businesses unable to plan.
01:56But we've seen in the US that the investment numbers that are suggested by President Trump
02:00are really not borne out by reality.
02:02I think we'll see that EU investments are also being hit by this.
02:07So there will be long term damage to business investments
02:11simply because they can't trust what the trade arrangements will be in the future.
02:17That's a really poor basis for investing.
02:20So no question there will be damage.
02:22The scale of it, very hard to tell at this point.
02:25Certainly is.
02:26David Hennig, thank you very much indeed.
Comments