That was shocking. The International Trade Court ruling on Wednesday said that Donald Trump misused the International Semark Science Evanical Powers Act to impose tariffs on the will of trading partners, which seemed nothing more than common sense.
But given the extent to which the courts usually obey the executive on national security issues, it was a dramatic and largely unexpected disruption of one of his most basic policies.
Of course, this is not the end of it. The so-called Article 232 tariffs on automobiles and steel are not affected by the ruling. Trump will appeal the decision to the Federal Circuit; in addition to that, he has a high court waiting for him if needed. He also has other obscure legislation that he could phase out to restore the tariff campaign. But it does emphasize that his trade policy is not only absurd in nature, but is also vulnerable to events, both working in a unified manner, both in courts or financial markets, and in this case. As the decision was announced, stock futures were getting higher and higher.
The timing of the court was surprisingly excellent. This is because the EU has entered a stage of fierce talks with Trump. Brussels are trying to avoid the president's normal tariffs threatened by 50% on Friday unless they reached a trade deal by June 1.
Did Trump blink by returning to the deadline, or did Von der Leyen agree to step up the talks? Maybe both. Trump’s parade of tariff troops to the top of the mountain and then descending again was a familiar move, especially as he initially claimed on Friday, he didn’t want to make a deal with the EU. His response to the idea of tacos (“Trump is always chicken” trade, based on his consistent exit from rising tariffs due to the shift in adverse financial markets, does not stop it from being true.
Still, Trump’s threat did force Brussels to be properly involved, apparently preparing to retreat, rather than being able to stand out from the talks with dramatic contempt. FT reports that the commission plans to waive its insistence on Trump’s repeal of the 10% benchmark “reciprocal” obligation — in any case, the court’s ruling is invalid — instead offering unilateral concessions. Von der Leyen is under pressure from the EU government, especially Italy, whose election base is located in the country's export-oriented industrial north.
Reasons based on credibility and substance, including the impact on the legacy of the rules-based global trading system, if a deal is reached with Trump, it would be a terrible result of the EU, which would be a fragile barrier to positioning agreement with the UK or China. After criticizing Britain's non-combination agreement, the United States still has no target date for deleting steel and automobile tariffs that Britain allegedly negotiated in the UK - the EU looks ridiculous, leaving unilateral concessions in the covenant without legal status.
The court's ruling provides the EU with a great opportunity to reorganize, screw up the courage, and recognize that Trump is much more vulnerable than his fanaticism suggests. Better revolt than trying to protect software boards from group members and large exporters, they instinctively prefer to pollute the bright routes of international trade law than to allow their foreign sales to be hurt.
It is more dangerous than the export danger of handbags, cognacs and even cars. The EU is always destined to be Trump's most difficult negotiating partner. Former Trump administration officials say the EU embodies everything the president instinctively dislikes: awakening liberalism, attachment to procedures and supranational rules, and the primitive power of failing to succumb to the supremacy of the United States. In a moment, you might even see Von der Leyen’s EU and Trump’s U.S. as a fundamental conflict against chaos, or a right to oppose capacity.
The court's ruling will at least cause weeks or months of chaos and chaos as Trump's administration circulates around trying to regain tariff power, and financial markets threaten to remind him of the stupidity of doing so. The best thing for the EU and the world trading system is that Brussels avoids all topics about unilateral offers and can only adhere to meaningful reciprocity agreements for products such as cars, while occasionally pointing it to the market and signing transactions elsewhere.
For example, a long-term extended trade agreement was reached with Mercosur Bloc in South America, pending approval. As the rest of the world continues to trade, leave Trump to judges and troubles.
Trade negotiations are often as much as the struggle between national constituencies. Trump's weak deal driven by stop-to-hand mercantilism among EU governments will show that the group cannot make the necessary sacrifices to become a heavyweight geopolitical power to uphold the rule of law. Recently, the ambitious EU has limited the EU to imports of grain, poultry and sugar in Ukraine, but at the request of Polish and French farmers, despite the need to support its neighbors and aspiring members against Russian aggression.
The rest of the world should hope that the EU, among all the major trading countries, can support Trump. European governments have long wanted to advocate global leadership. They had previously declared "European Hour" and then failed. Trade is an area where the EU has undoubtedly legitimacy of collective action and the scale and economic resilience of resisting Trump bullying. The U.S. Court of International Trade offers an excellent opportunity for Brussels. It should be accepted.
alan.beattie@ft.com