What does ‘America First’ mean for global trade?

Although the EU has criticized the policies of US President Donald Trump as isolationist, European tariffs are on average much higher than those in the US, noted Hapag-Lloyd after hosting three experts who discussed the economic situation in the US and Europe at the head office of Hapag-Lloyd in Hamburg. Richard Yoneoka, US Consul General in Hamburg, opened the panel discussion by evoking the long-standing connection between Europe and the United States – and by mentioning that disputes with the respective sitting US presidents were also part of this history. At the same time, he also appealed to see this as the right time to negotiate in order to get to the bottom of the trade imbalance. He said that “if we do not rethink our trade strategy now, we will have to do it at a later point in time – and that possibly under unfavourable conditions.”

Professor Dr Jacques Pelkmans, Peter S. Rashish, Moderator Dr Uwe Jean Heuser and Professor Dr Gabriel J. Felbermayr were the panellists.

Rashish, Senior Fellow and Director of the Geoeconomics Programme of the American Institute for Contemporary German Studies (AICGS) at the Johns Hopkins University in Washington, said that the US’s real problem was its debt, which could not be satisfied through a modified trade policy alone.

“And yet this seems to be one of the set screws for the American policy at present time. However, I believe that the escalation we are currently seeing is necessary to find a solution to the problem.”

Rashish said that “Donald Trump’s administration is currently testing whether becoming less dependent on imports would be beneficial to the USA. They are trying something that no other US government has done before. We are therefore witnesses to a big experiment.”

Professor Pelkmans, senior fellow of the Centre for European Policy Studies (CEPS) in Brussels and a professor at the College of Europe in Bruges, who also serves as advisor to the European Commission, the OECD, the World Bank, UNIDO, ASEAN and to governments in Europe and Asia, said that “Europe is currently going through a difficult but also very fascinating period. The tariffs imposed on Europe by President Trump are, in my opinion, irrational and do nothing to solve the actual problem. However, Germany also reacted with irrational tariffs – affecting, for example, American cars, for which there is barely any demand. Trump’s irrationality is dangerous because it could put us in a dilemma like in the 19th century, when trade and foreign policy were intertwined with each other yet there were no global rules.”