The Unpredictable Trade Warrior

In their WIFO guest commentary in the daily newspaper "Der Standard" of 10 October 2019, Fritz Breuss and Elisabeth Christen show that trade conflicts are not new: but under US President Donald Trump small trade wars become global.

According to Breuss and Christen, the "deal maker" Donald Trump believes he can make trade policy like real estate deals. He doesn't care about the grown world trade order.

US President Donald Trump abhors multilateralism, which is why he is very sceptical about the WTO and the EU. Under the slogan "America first", his preference is for bilateralism. He wants to conclude agreements with only one partner.

Despite Trump's contempt for the WTO, he benefits from it right now. According to the decision of the WTO Dispute Settlement Body of 2 October 2019 in the dispute over subsidies for Airbus, the USA is allowed to impose customs duties on EU imports worth 7.5 billion €. In a few months' time, the WTO is likely to grant the EU similar penalties in the Boeing dispute. An initial statement by the European Commission therefore recommends that instead of fighting each other with punitive tariffs, an agreement be concluded to reduce subsidies.

The full commentary (in German) can be found here.